REVIEWER (LABOR LAW 1)

1. Aliens required to secure AEP

Who are the foreign nationals required to secure AEP?

Foreign nationals who intend to engage in gainful employment in the
Philippines with an employer – employee relationship; foreign professionals
allowed by the Professional Regulation Commission (PRC) to practice their
profession in the Philippines; and holders of Special Investors Resident Visa
(SIRV), Special Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or
Special Non-Immigrant Visa 47(a)2 who occupy any executive, advisory,
supervisory, or technical position in any establishment are required to
secure AEP from DOLE.

2. Aliens exempted from AEP

Who are exempted from securing an AEP?

Exemption. The following categories of foreign nationals are exempt from
securing an employment permit:

2.1 All members of the diplomatic service and foreign government officials
accredited by and with reciprocity arrangement with the Philippine
government;

2.2 Officers and staff of international organizations of which the Philippine

government is a member, and their legitimate spouses desiring to work in
the Philippines;

2.3 Foreign nationals elected as members of the Governing Board who do

not occupy any other position, but have only voting rights in the
corporation;

2.4 All foreign nationals granted exemption by law;

2.5 Owners and representatives of foreign principals whose companies

are accredited by the Philippine Overseas Employment Administration
(POEA), who come to the Philippines for a limited period and solely for the
purpose of interviewing Filipino applicants for employment abroad;

2.6 Foreign nationals who come to the Philippines to teach, present

and/or conduct research studies in universities and colleges as visiting,
exchange or adjunct professors under formal agreements between the
universities or colleges in the Philippines and foreign universities or
colleges; or between the Philippine government and foreign government;
provided that the exemption is on a reciprocal basis; and

2.7 Resident foreign nationals.

3. SVEG definition; rationale; who may avail

SPECIAL VISA FOR EMPLOYMENT GENERATION (SVEG)

-is a special visa issued to a qualified non-immigrant foreigner who shall

actually employ at least 10 Filipinos in a lawful and sustainable enterprise,
trade, or industry. Qualified foreign nationals who are granted the SVEG
shall be considered special non-immigrants with multiple entry privileges
and conditional extended stay, without the need of prior departure from
the Philippines.

What is the rationale for the SVEG?

EXECUTIVE ORDER NO. 758
It is founded on public interest, particularly on an aspect of employment
generation for Filipinos. According to the April 2008 survey of the National
Statistics Office (NSO), there are 2.9 million Filipinos who are currently
unemployed. On the other hand, there are foreigners who want to
maintain a lawful presence in the Philippines by actually directly or
exclusively engaging in lawful, viable, and sustainable trade, business,
industry, or activity offering local employment.

Under E.O. no. 758 SECTION 2.

Who may avail - Non-immigrant foreigners who wish to avail of the SVEG
should comply with the following conditions:
a. The foreigner shall actually, directly or exclusively engage in a viable
and sustainablecommercial investment/enterprise in the Philippines,
exercises/performs management acts or has the authority to hire,
promote and dismiss employees;
b. He evinces a genuine intention to indefinitely remain in the Philippines;
c. He is not a risk to national security; and
d. The foreigner’s commercial investment/enterprise must provide actual
employment to at least ten (10) Filipinos in accordance with Philippine
labor laws and other applicable special laws.
The above mentioned requirements must be continually satisfied by the
foreigner for him/her to continue to be a holder of the SVEG.

4. Goals and objectives of RA 7796

The goals and objectives of this Act are:

 Promote and strengthen the quality of technical education and

skills development programs to attain international competitiveness;

 Focus technical education and skills development on meeting the

changing demands for quality middle-level manpower;
  Encourage critical and creative thinking by disseminating the
scientific and technical knowledge base of middle-level
manpower development programs;

 Recognize and encourage the complementary roles of public and

private institutions in technical education and skills development
and training systems; and

 Inculcate desirable values through the development of moral

character with emphasis on work ethic, self-discipline, self-reliance
and nationalism. (Sec.3 of RA 7796)

5. Explain the dual training system

Dual Training System is the framework where a worker-trainee receive

training both in school through theoretical instructions and in the workshop
or factory with actual practice or application. This is to:

a. Promote maximum protection and welfare of the worker-trainee;

b. Improve the quality, relevance, and accountability of technical

education and skill development;

c. Accelerate the employment-generation efforts of the government; and

d. Expand the range of opportunities for upward social mobility of the

school-going population beyond traditional higher levels of formal
education (Sec.21 RA 7796)

6. Distinguish between special workers and special group of employees

Special workers are those whose earning power is reduced such as

Apprentices, Learners, and Handicapped workers. Special group of
employees are those who receive certain benefits as regards to their
compensation or to their working conditions, namely, Women, Minors,
Househelpers, and Homeworkers. (Art. 57 Labor Code)

7. Distinctions between apprenticeship and learnership

Chapter I, Title II Training and Employment of special Workers under the LC

provides that “apprenticeship” means any training on the job
supplemented by related theoretical instruction. And an apprentice is a
worker who is covered by a written apprenticeship agreement with an
individual employer or any of the entities involving apprenticeable
occupations cognized under this Chapter. Apprenticeable occupation
means any trade, form of employment or occupation which requires
more than three (3) months of practical training on the job supplemented
 by related theoretical instruction, the employer binds himself through the
apprenticeship agreement to train the apprentice and the apprentice in
turn accepts the terms of training. These are the qualifications of an
apprentice:

a. be at least fifteen (15) years of age, provided those who are at least
fifteen (15) years of age but less than eighteen (18) may be eligible for
apprenticeship only in non-hazardous occupation;

b. be physically fit for the occupation in which he desires to be trained;

c. possesses vocational aptitude and capacity for the particular

occupation as established through appropriate tests; and

d. possesses the ability to comprehend and follow oral and written

instructions.

The following are the important principles applicable to a worker who is

covered by a written apprenticeship agreement:

a. Wage rate of apprentices is 75% of the statutory minimum wage.

b. Apprentices become regular employees if program is not approved by

DOLE.

c. Ratio of theoretical instructions and on-the-job training is 100 hours of

theoretical instructions for every 2,000 hours of practical training on-the-
job.

On the otherhand, Chapter II, Title II of Book II of the Labor Code covers
Learnership. Aa “learner” is a person hired as a trainee in industrial occupations
which are non-apprenticeable and which may be learned through practical
training on the job for a period not exceeding three (3) months, whether or not
such practical training is supplemented by theoretical instructions. Wage rate of
learners is 75% of the statutory minimum wage. These are the pre-requisites before
learners may be hired or validly employed:

a. when no experienced workers are available;

b. the employment of learners is necessary to prevent curtailment of
employment opportunities; and
c. the employment does not create unfair competition in terms of labor
costs or impair or lower working standards.

8. Prohibition on discrimination (a-i)

“Article 79. When employable. Handicapped workers may be employed

when their employment is necessary to prevent curtailment of
employment opportunities and when it does not create unfair
competition in labor costs or impair or lower working standards.”

No entity, whether public or private, shall discriminate against a qualified

person with disability by reason of disability in regard to job application
procedures, the hiring, promotion, or discharge of employees, employee
compensation, job training, and other terms, conditions and privileges of
employment. The following constitutes acts of discrimination:

a.) Limiting, segregating or classifying a job applicant with disability in such

a manner that adversely affect his work opportunities;

b.) Using qualification standards, employment tests or other selection

criteria that screen out or tend to screen out a person with disability unless such
standards, tests or rather selection criteria are shown to be job-related for the
position in question and are consistent with business necessity;

c.) Utilizing standards, criteria, or methods of administration that:

1.) have the effect of discrimination on the basis of disability; or
2.) perpetuate the discrimination of others who are subject to
common administrative control

d.) Providing less compensation, such as salary, wage or other forms of

remuneration and fringe benefits, to a qualified employee with disability,
by reason of his disability, than the amount to which a non-disabled person
performing the same work is entitled;

e.) Favoring a non-disabled employee over a qualified employee with

disability with respect to promotion, training opportunities, study and
scholarship grants, solely on account of the latter’s disability;

f.) Re-assigning or transferring an employee with disability with respect to a

job or position he cannot perform by reason of his disability;

g.) Dismissing or terminating the service of an employee with disability by

reason of his disability unless the employer can prove that he impairs the
satisfactory performance of the work involved to the prejudice of the business
entity; provided however, that the employer first sought to provide reasonable
accommodation for persons with disability;

h.) Failing to select or to administer in the most effective manner

employment tests which accurately reflects the skills, aptitude or other factor of
the applicant or employee with disability that such tests purports to measure,
rather than the impaired sensory, manual or speaking skills of such applicant
or employee, if any; and

i.) Excluding persons with disability from membership in labor unions or

similar organizations

9. Employees not covered under Art. 82 LC

Article 82 of the labor Code and Section 2, Rule I, Book III of the Rules to Implement
the Labor Code, expressly exclude the following persons or employees from the
coverage of Title I, Book III thereof, to wit:
a. Government employees- they are governed by the Civil Service Law,
rules and;
b. Managerial employees;
 c. Other officers or members of a managerial staff;
d. Domestic servants and persons in the personal service of another,
such as house helpers;
e. Workers paid by result;
f. Field personnel; and
g. Members of the family of the employer

10. Art. 82 vs. 217 (M) of LC

Article 82

-“Managerial employees” refer to those whose primary duty consists of

the management of the establishment in which they are employed or of
a department or subdivision thereof, and to other officers or members of
the managerial staff.

- Used only for purposes of Book III (working conditions and rest periods
and benefits)
-Supervisors are members of the managerial staff

Article 212 (M)

-"Managerial employee"is one who is vested with the powers or
prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees.

-Used only for purposes of Book V (forming, joining and assisting of unions,
certification election and collective bargaining)
-Supervisors are not manager employees under Book V

11. Rule on domestic helper assigned to the employer’s business

establishment

-A laundrywoman is staff houses of a company or within the premises of

the business of the employer, not actually serving the family of the
employer, is a regular employee.(Apex Mining Co., Inc v NLRC)

12. 2 categories of employees paid by result; distinguish

1. Those whose time and performance are supervised by the employer.

-there is an essential element of control and supervision over the

manner as how to work is to be performed
2. Those whose time and performance are unsupervised
-The employer's control is over the result of the work.
13. Sime Darby case; Manila Jockey Club Employee Union case

 Sime Darby Case: The right to fix the work schedules of the employees rests
principally on their employer. The reason for the adjustment is for the
efficient conduct of its business operations and its improved production. It
rationalizes that while the old work schedule included a 30-minute paid
lunch break, the employees could be called upon to do jobs during that
period as they were “on call.” Even if denominated as lunch break, this
period could very well be considered as working time because the factory
employees were required to work if necessary and were paid accordingly
for working. Since the employees are no longer required to work during this
one-hour lunch break, there is no more need for them to be compensated
for this period.
Further, management retains the prerogative, whenever exigencies of the
service so require, to change the working hours of its employees. So long as
such prerogative is exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid agreements,
such exercise is allowed.

 Manila Jockey Club Employee Case:

Valid Exercise of management prerogative
When the races were moved to 2:00 p.m., there was no other choice
for management but to change the employees' work schedule as there
was no work to be done in the morning. Evidently, the adjustment in the
work schedule of the employees is justified.
While the CBA provided for a schedule, it also reserved expressly to
management the right to change existing methods or facilities to change
the schedules of work. The CBA also grants respondent the prerogative to
relieve employees from duty because of lack of work.
No diminution of benefits
The CBA does not guarantee overtime work for all the employees but
merely provides that "all work performed in excess of seven (7) hours work
schedule and on days not included within the work week shall be
considered overtime and paid as such."
Respondent was not obliged to allow all its employees to render
overtime work everyday for the whole year, but only those employees
whose services were needed after their regular working hours and only
upon the instructions of management. The overtime pay was not given to
each employee consistently, deliberately and unconditionally, but as a
compensation for additional services rendered. Thus, overtime pay does
not fall within the definition of benefits under Article 100 of the Labor Code
on prohibition against elimination or diminution of benefits.

14. Work day; work week; reckoning point

 Work day means 24 consecutive-hour period which commences from the
time the employee regularly starts to work. It does not necessarily mean
that it based on the ordinary calendar day from 12:00 midnight to 12:00
midnight unless the employee starts to work at this unusual hour.

Work week is a week consisting of 168 consecutive hours or 7 consecutive

24 hour work days beginning at the same hour and on the same calendar
day each calendar week.

The reckoning point on how a work day or work week is from the time the
employee regularly starts to work on a work day or from the time and day
the employee regularly starts to work on a work week.

15. Explain CWW

A compressed work week is allowed provided that the employees

voluntarily agree thereto, that there is no diminution in pay, and it is only
for a temporary duration.

16. Flexi work schedule under RA 8972; during economic difficulties and
emergencies

Under RA 8972 Solo Parents' Welfare Act of 2000, flexible work schedule is
defined as the right granted to a solo parent employee to vary his/her
arrival and departure time without affecting the core work hours as
defined by the employer.
Who is a Solo Parent?

Any individual who falls under any of the following categories:

(1) A woman who gives birth as a result of rape and other crimes against
chastity even without a final conviction of the offender: Provided, That the
mother keeps and raises the child;

(2) Parent left solo or alone with the responsibility of parenthood due to
death of spouse;

(3) Parent left solo or alone with the responsibility of parenthood while the
spouse is detained or is serving sentence for a criminal conviction for at
least one (1) year;

(4) Parent left solo or alone with the responsibility of parenthood due to
physical and/or mental incapacity of spouse as certified by a public
medical practitioner;

(5) Parent left solo or alone with the responsibility of parenthood due to
legal separation or de facto separation from spouse for at least one (1)
year, as long as he/she is entrusted with the custody of the children;
 (6) Parent left solo or alone with the responsibility of parenthood due to
declaration of nullity or annulment of marriage as decreed by a court or
by a church as long as he/she is entrusted with the custody of the
children;

(7) Parent left solo or alone with the responsibility of parenthood due to
abandonment of spouse for at least one (1) year;

(8) Unmarried mother/father who has preferred to keep and rear her/his
child/children instead of having others care for them or give them up to a
welfare institution;

(9) Any other person who solely provides parental care and support to a
child or children;

(10) Any family member who assumes the responsibility of head of family
as a result of the death, abandonment, disappearance or prolonged
absence of the parents or solo parent.

A change in the status or circumstance of the parent claiming benefits under

this Act, such that he/she is no longer left alone with the responsibility of
parenthood, shall terminate his/her eligibility for these benefits.

Flexible Work Schedule. - The employer shall provide for a flexible working
schedule for solo parents: Provided, That the same shall not affect individual
and company productivity: Provided, further, That any employer may request
exemption from the above requirements from the DOLE on certain meritorious
grounds.

Parental Leave. - In addition to leave privileges under existing laws, parental

leave of not more than seven (7) working days every year shall be granted to
any solo parent employee who has rendered service of at least one (1) year.

A flexible work schedule of a solo parent employee may only be denied if:
1. The core work-hours are affected.
2. The employer is exempted on meritorious grounds. In such case, the
employer files a request for exemption with the Department of Labor and
Employment.
3. The employee is in government service in which case flexible work schedule
is subject to the discretion of the head of agency.

Flexible Work Schedule in times of Economic difficulty and emergencies, there

are 6 flexible work arrangements in instances mentioned above , as stated in
DOLE Department Advisory No.2, Series of 2009.

1. “Compressed work week.” This refers to one where the normal work week is
reduced to less than six days but the total number of work hours of 48 hours per
week shall remain. The normal work day is increased to more than eight hours
but not to exceed 12 hours, without corresponding overtime premium. The
concept can be adjusted accordingly depending on the normal work week of
the company pursuant to the provisions of Department of Labor and
Employment Department Advisory 2, s. 2004 or the “Implementation of
compressed work week schemes.”

2. “Reduction of work days.” This arrangement refers to one where the normal
work days per week are reduced but should not last for more than six months.

3. “Rotation of workers.” This refers to one where the employees are rotated or
alternatively provided work within the work week.

4. “Forced leave,” where employees are required to go on leave for several

days or weeks using their leave credits if there are any.

5. “Broken time schedule,” refers to one where the work schedule is not
continuous but the work hours within the day or week remain.

6. “Flexi-holidays schedule” where the employees agree to avail the holidays at

some other days provided there is no diminution as a result of such
arrangement.

Under these flexible work arrangements, the employers and the employees are
encouraged to explore alternative schemes under any agreement and
company policy or practice in order to cushion and mitigate the effect of the
loss of income of the employees.

17. Policy instruction No. 54

Policy Instruction No. 54

To: All Concerned

Subject: Working Hours and Compensation of Hospital/Clinic Personnel

This issuance clarifies the enforcement policy of this Department on the working
hours and compensation of personnel employed by hospitals/clinics with a bed
capacity of 100 or more and those located in cities and municipalities with a
population of one million or more.

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work
week for hospital/clinic personnel. At the same time, the Act prohibits the
diminution of the compensation of these workers who would suffer a reduction
in their weekly wage by reason of the shortened workweek prescribed by the
Act. In effect, RA 5901 requires that the covered hospital workers who used to
work seven (7) days a week should be paid for such number of days for working
only 5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel,

considering the nature of their work, and at the same time guarantee the
payment to them of a full weekly wage for seven (7) days. This is quite clear in
the Exemplary Note of RA 5901 which states:
 As compared with the other employees and laborers, these hospital
and health clinic personnel are over-worked despite the fact that
their duties are more delicate in nature. If we offer them better
working conditions, it is believed that the "brain drain", that our
country suffers nowadays as far as these personnel are concerned
will be considerably lessened. The fact that these hospitals and
health clinics personnel perform duties which are directly
concerned with the health and lives of our people does not mean
that they should work for a longer period than most employees and
laborers. They are also entitled to as much rest as other workers.
Making them work longer than is necessary may endanger, rather
than protect the health of their patients. Besides, they are not
receiving better pay than the other workers. Therefore, it is just and
fair that they may be made to enjoy the privileges of equal working
hours with other workers except those excepted by law. (Sixth
Congress of the Republic of the Philippines, Third Session, House of
Representatives, H. No. 16630)

The Labor Code in its Article 83 adopts and incorporates the basic provisions of
RA 5901 and retains its spirit and intent which is to shorten the workweek of
covered hospital personnel and at the same time assure them of a full weekly
wage.

Consistent with such spirit and intent, it is the position of the Department that
personnel in subject hospital and clinics are entitled to a full weekly wage for
seven (7) days if they have completed the 40-hour/5-day workweek in any
given workweek.

All enforcement and adjudicatory agencies of this Department shall be guided

by this issuance in the disposition of cases involving the personnel of covered
hospitals and clinics.

Done in the City of Manila, this 12th day of April, 1988.

(Sgd.) FRANKLIN
M. DRILON
Secretary

In SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA, et al. vs.

NLRC and SAN JUAN DE DIOS HOSPITAL. SC held that “ Policy Instructions No. 54
to our mind unduly extended the statute. The Secretary of Labor moreover erred
in invoking the "spirit and intent" of Republic Act No. 5901 and Article 83 of the
Labor Code for it is an elementary rule of statutory construction that when the
language of the law is clear and unequivocal, the law must be taken to mean
exactly what it says. No additions or revisions may be permitted. Policy
Instructions No. 54 being inconsistent with and repugnant to the provision of
Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it
is hereby, declared void”

If petitioners are entitled to two days off with pay, then there appears to be no
sense at all why Section 15 of the implementing rules grants additional
compensation equivalent to the regular rate plus at least twenty-five percent
thereof for work performed on Sunday to health personnel, or an "additional
straight-time pay which must be equivalent at least to the regular rate" "[f]or
work performed in excess of forty hours a week.

A perusal of Republic Act No. 5901 reveals nothing therein that gives two days
off with pay for health personnel who complete a 40-hour work or 5-day
workweek. In fact, the Explanatory Note of House Bill No. 16630 (later passed into
law as Republic Act No. 5901) explicitly states that the bill's sole purpose is to
shorten the working hours of health personnel and not to dole out a two days off
with pay.

18. Principles in determining hours worked (a-d)

Under Book Three of the Labor Code

SECTION 4. Principles in determining hours worked. — The following general

principles shall govern in determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:

(a) All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in productive labor
or involve physical or mental exertion.

(b) An employee need not leave the premises of the work place in order that
his rest period shall not be counted, it being enough that he stops working, may
rest completely and may leave his work place, to go elsewhere, whether within
or outside the premises of his work place.

(c) If the work performed was necessary, or it benefited the employer, or the
employee could not abandon his work at the end of his normal working hours
because he had no replacement, all time spent for such work shall be
considered as hours worked, if the work was with the knowledge of his employer
or immediate supervisor.

(d) The time during which an employee is inactive by reason of interruptions in

his work beyond his control shall be considered working time either if the
imminence of the resumption of work requires the employee's presence at the
place of work or if the interval is too brief to be utilized effectively and gainfully
in the employee's own interest.

19. Effects of power interruptions

The following are effects of power interruptions or brown-outs:

1. Brown-outs of short duration but not exceeding twenty (20) minutes

shall be treated as worked or compensable hours whether used
productively by the employees or not.
2. Brown-outs running for more than twenty (20) minutes may not be
treated as hours worked provided any of the following conditions are
present:
 a. The employees can leave their workplace or go elsewhere
whether within or without the work premises; or
b. The employees can use the time effectively for their own interest.
3. In each case, the employer may extend the working hours of his
employees outside regular schedules to compensate for the loss of
productive man-hours without being liable for overtime pay.
4. Industrial enterprises with one or two workshifts may adopt any of the
workshifts prescribed for enterprises with three (3) workshifts to prevent
serious loss or damage to materials, machineries or equipment that
may result in case of power interruptions.
5. The days when work was not required and no work could be done
because of shutdown due to electrical power interruptions, lack of raw
materials and repair of machines, are not deemed hours worked.

20. Meal time not less than 20 mins. a) when compensable; b) when not
compensable (a-f)

1. Shortening of meal time to not less than 20 minutes, WHEN COMPENSABLE.

In the following cases, however, a meal period of not less than twenty
minutes may be given by the employer provided that such meal period is
credited as compensable hours worked of the employee:

a. Where the work is a non-manual work in nature or does not

involve strenuous physical exertion;
b. Where the establishment regularly operates for not less than
sixteen hours a day;
c. In cases of actual or impending emergencies, or when there is
urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would
otherwise suffer; and
d. Where the work is necessary to prevent serious loss of perishable
goods.

2. Shortening of meal time to not less than 20 minutes, WHEN NOT

COMPENSABLE.

The law allows a situation where the employees themselves request for the
shortening of meal period to not less than 20 minutes for the purpose of allowing
them to leave work earlier than the lapse of the eight hours required by law. This
shortened period, however, shall not be considered compensable working time
provided the following conditions are complied with:

a. The employees voluntarily agree in writing to a shortened meal

period of thirty (30) minutes and are willing to waive the overtime
pay for such shortened meal period.
b. There should be no diminution in the benefits of the employees
which they receive prior to the effectivity of the shortened meal
period;
 c. The work of the employees does not involve strenuous physical
exertion and they are provided with adequate coffee breaks in
the morning and afternoon.
d. The value of the benefits derived by the employees from the
proposed work arrangement is equal to or commensurate with
the compensation due them for the shortened meal as well as
the overtime pay for 30 minutes as determined by the
employees concerned;
e. The overtime pay of the employees will become due and
demandable if ever they are permitted or made to work
beyond 4:30 p.m.; and
f. The effectivity of the proposed working time arrangement shall
be for a temporary duration as determined by the Secretary of
Labor and Employment.

21. Illustrations on pages 400-402 on NSD

a. For regular work in the night shift on an ordinary day, the night shift differential
pay is plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate.
Thus using as basis P382.00 which is the minimum daily wage rate of a private
sector non-agricultural workers and employees in the NCR, the night shift
differential pay under this situation may be computed as follows:
Night shift differential pay for regular night shift work on an ordinary day
P382 + 10% of P382 = P382 + (0.10 x P382)
= 382 + P38.20
P420.20/day
Or

110% of P382 = 1.1 x P382

=P420.20/day

b. For regular work in the night shift on a rest day, the night shift differential pay is
plus 10% of the basic hourly rate on a rest day or a total of 110% of the regular
hourly rate. Thus, using the same P382.00 as basis, the night shift differential pay
under this situation may be computed as follows:
Night shift differential pay for regular night shift work on a rest day:
(130% of P 382) + 10% of (130% of P382)
= (1.3 x P382) + 0.10 x (1.3 x P382)
= P496.60 + P49.66
= P546.26/day

Or

110% of (130% of P382)

=1.1 x (1.3 x P382)
=P546.26/day

c. For regular work in the night shift on a special holiday or regular holiday, it is
important to note that since special holidays and regular holidays are calendar
days (i.e., 24-hour period from 12 midnight to 12 midnight of the following day),
the night shift is either cut-off at 12 midnight or starts only at 12 midnight. Hence,
 the night shift differential pay for such days may be determined by the hour on
the basis of the hourly rate not the daily rate.

Thus, using the same P382.00 or the equivalent hourly rate of P47.75
(P382/8 hours) as basis, the night shift differential pay may be computed
as follows:

c.1. On a special day:

Night shift differential pay for regular night shift work on a special
holiday:

(130% of P47.75) + 10% of (130% of P47.75)

= (1.3 x P47.75) + 0.10 x (1.3 x P47.75)
=P62.08 + P6.21
=P68.29/hour

Or

110% of (130%of 47.75)

=1.1 x (1.3 x P47.75)
=P68.29/hour

c. 2. On a regular holiday:
Night shift differential pay for regular night shift work on a regular
holiday:

(200% of P47.75) + 10% of (200% of 47.75)

= (2.0 x P47.75) + 0.10 x (2.0 x P47.75)
=95.50 + P9.55
=P105.05/hour
Or
=110% of (200% of P47.75)
=1.1 x (2.0 x P47.75)
=105.05/hour

d. For overtime night shift work falling on an ordinary day, the overtime night shift
differential pay is plus 100% of 125% of basic hourly rate or a total of 110% of 125%
of basic hourly rate. Thus, using P382.00 or the hourly rate of P47.75 (P382/8
hours) as basis, the overtime night shift differential pay under this situation may
be computed as follows:

Overtime night shift differential pay for overtime night shift work on an
ordinary day:
(125% of P47.75) + 10% of (125% of P47.75)
= (1.25 x P47.75) + 0.10 x (1.25 x P47.75)
=P59.69 + P5.97
= P65.66/hour

Or

=110% of (125% of P47.75)

= 1.1 x (1.25 x P47.75)
=P65.66/hour
 e. For overtime night shift work falling on rest day, special holiday or regular holiday,
the following illustrations of computation may prove helpful (using the same basis
as above, i.e., P382.00 or P47.75 per hour):

e.1. On a special holiday or rest day:

Overtime night shift differential pay for overtime night shift work on a
special holiday or rest day:
130% x (130% of P47.75) + 10% of (130% of 130% of P47.75)
=1.3 x (1.3 x P47.75) + 0.10 x (1.3 x 1.3 x P47.75)
=P80.70 + P8.07
=P88.77/hour

Or

169% of P47.75 + 10% of (169% of P47.75)

=80.70 + P8.07
=P88.77/hour

e.2. On a regular holiday:

Overtime night shift differential pay for overtime night shift work on a
regular holiday:
130% x (200% of P47.75) + 10% of (130% of 200% of P47.75)
=1.3 x (2.0 x P47.75) + 0.10 x (1.3 x 2.0 x P47.75)
=P124.15 + P12.42
=P136.57/hour

Or

260% of P47.75 + 10% of (260% of P47.75)

=P124.15 + P12.42
=P136.57/hour

22. Illustrations on pages 407-408 on OT

GUIDE IN THE COMPUTATION OF NIGHT SHIFT DIFFERENTIAL PAY

Ordinary day 100& or 1

Sunday or rest day 130 % or 1.3
Special day 130% or 1.3
Special day falling on a rest day 150% or 1.5
Regular Holiday 200% or 2
Regular holiday falling on rest day 260% or 2.6
Ordinary day, night shift 1 x 1.1 = 1.1 or 110%
Rest day, night shift 1.3 x 1.1 =1.43 or 143%
Special day, night shift 1.3 x 1.1 = 1.43 or 143%
Special day, rest day, night shift 1.5 x 1.1 = 1.65 or 165%
Regular holiday, night shift 2 x1.1 = 2.2 or 220%
Regular holiday. Rest day, night shift 2.6 x 1.1 = 2.86 or 286%
Double holiday, night shift 3 x 1.1 = 3.3 or 330%
Double holiday, rest day, night shift 3.9 x 1.1 = 4.29 or 429
Ordinary day, overtime (OT) 1 x 1.25 = 1.25 or 125%
Rest day, overtime 1.3 x 1.3 = 1.69 or 169%
Special day, rest day, overtime 1.5 x 1.3 = 1.95 or 195%
Regular holiday, overtime 2 x 1.3 = 2.6 or 260%
Regular holiday, rest day. Overtime
Double holiday, overtime
Double holiday, rest day, overtime
Ordinary day. Night shift, overtime
Rest day, night shift, overtime
Special day, night shift, overtime
Special day, rest day, night shift, OT
Regular holiday, night shift, OT
Regular holiday, rest day, night shift, OT
Double holiday, night shift, OT
Double holiday, rest day, night shift, OT
2.6 x 1.3 = 3.38 or 338%
3 x 1.3 = 3.9 or 390%
3.9 x 1.3 = 5.07 or 507%
1 x 1.1 x 1.25 = 1.375 or 137.5%
1.3 x 1.1 x 1.3 = 1.859 or 185.9%
1.3 x 1.1 x 1.3 = 1.859 or 185.9%
1.5 x 1.1 x 1.3 = 2.145 or 214.5%
2 x 1.1 x 1.3 = 286 or 286%
2.6 x 1.1 x 1.3 = 3.718 or 317.8%
3 x 1.1 x 1.3 = 4.29 or 429%
3.9 x 1.1 x 1.3 = 5.577 or 557.7%

23. Validity of stipulated OT on CBA + Built in OT + Seafarer’s OT

Generally, the premium pay for work performed on rest days, special
days, or regular holidays is included as part of the regular rate of the employee
in the computation of overtime pay for the overtime work rendered on said
days, especially if the employer pays only the minimum rates prescribed by law.
The employees and employer, however, may stipulate in their collective
agreement the payment for overtime work at rates higher than those provided
by law.

Built-in Overtime Pay

In case the employment contract stipulates that the compensation
includes built-in overtime pay and the same is duly approved by the Director of
the Bureau of Local Employment, the non-payment of any overtime pay for
overtime work is justified and valid.
In PAL Employees Savings and Loan Association, Inc (PESALA) vs NLRC,
where the period of normal working hours per day was increased to twelve (12)
hours, it was held that the employer remains liable for whatever deficiency in
the amount for overtime work in excess of the first 8 hours, after recomputation
shows such deficiency.

Entitlement of Seafarers to Overtime Pay

a) Actual overtime service necessary to justify claim for overtime pay
The correct criterion in determining whether or not seafarers are
entitled to overtime pay is not whether they were on board and a cannot
leave ship beyond the regular 8 working hours a day, but whether they
actually rendered service in excess of said number of hours.
In the case of Stolt-Nielsen, the SC ruled that the rendition of
overtime work and the submission of sufficient proof that said work was
actually performed are conditions to be satisfied before a seaman could
be entitled to overtime pay which should be computed on the basis of
30% of the basic monthly salary.
In PCL Shipping, the SC found that the private respondent was not
entitled to overtime pay because he failed to present any evidence to
prove that he rendered service in excess of regular 8 working hours a day.
But in Acuña, petitioners’ claims for overtime pay were allowed despite
their failure to substantiate them. It was declared that the claims of OFWs
against foreign employers could not be subjected to the same rules of
evidence and procedure applicable to complainants whose employers
are locally based.
b) Guaranteed overtime pay, not included in the computation of salary for
unexpired portion
In the computation of the monetary award to an illegally dismissed
OFW, the “guaranteed overtime” pay should not be included as
part of his salary for the unexpired portion of his contract. This is so
because it is improbable that the OFW has rendered overtime work
during the unexpired term of his contract. Consequently, there is no
factual or legal basis therefor.

24. Waiver and Laches on OT

a. Waiver
The right to claim overtime pay is not subject to waiver. Such right is
governed by law and not merely by the agreement of the parties. While
rights may be waived, the same must not be contrary to law, public order,
public policy, morals, good customs or prejudicial to a third person with a
right recognized by law.
But if the waiver is done in exchange for and in consideration of
certain valuable privileges, among them that the value of said privileges
did not compensate for such work, such waiver may be considered valid.

b. Effect of laches or estoppel

The principle of laches or estoppel does not apply to the right of
employees to claim past overtime pay. Mere lapse of time or silence of
the employees is not sufficient to defeat and frustrate the purpose of the
law in granting such right by mere indirection.
Laches is the failure or neglect for an unreasonable and
unexplained length of time to do that which, by exercising due diligence,
could or should have been done earlier. Stated differently, laches may
also be defined as such neglect or omission to assert a right taken in
conjunction with the lapse of time and other circumstances causing
prejudice to an adverse party as will operate as a bar in equity.
The question of laches is addressed to the sound discretion of the
court, and since it is an equitable doctrine, its application is controlled by
equitable considerations. It cannot work to defeat justice or to perpetrate
fraud or injustice. Laches cannot be charged against a worker when he
has not incurred undue delay in the assertion of his rights because he filed
his complaint within the 3-year reglementary period for the filing of
monetary claims. Under this situation, he cannot be said to have slept on
his rights for an unreasonable length of time.
When an employee fails to assert his right immediately upon
violation thereof, such failure cannot ipso facto be deemed as a waiver
of the oppression. The worker and his employer are not equally situated.
When a worker keeps silent inspite of flagrant violations of his rights, it may
be because he is seriously fearful of losing his job. The dire consequences
thereof on his family and his dependents must have prevented him from
complaining. In short his thoughts of sheer survival weigh heavily against
launching an attack upon his more powerful employee.
 25. Rationale behind Art. 88 on undertime & leave of absence offsetting

Undertime work on any particular day shall not be offset by overtime work
on any other day. Permission given to the employee to go on leave on
some other day of the week shall not exempt the employer from paying
the additional compensation required by law. (Art. 88 LC)

When undertime is offset against the overtime, the employee is ‘made to

pay’ twice for his undertime hours. This is because the employee’s leave
credits are reduced to the extent of the undertime hours while he is made
to pay for the undertime hours with work beyond the regular working
hours. Clearly, this is not a fair situation for the employee, even when the
undertime is his fault.

The proper approach should be to deduct the undertime hours from the
available leave credits of the employee and to pay the employee
overtime for the extended hours of work.

If the employee has consumed his leave credits, his undertime hours may
be deducted from his salary, but he should still be paid his overtime
compensation for work performed beyond his regular working hours.
(NATIONAL WATERWORKS and SEWERAGE AUTHORITY, vs. NWSA
CONSOLIDATED UNIONS, ET AL.)

26. Blue Sunday Law

No commercial, industrial, or agricultural enterprise or establishment

including stores and shops of any kind shall be open on any Sunday,
Christmas Day, New Year’s Day, Holy Thursday, and Good Friday, from
12:00 midnight to 12:00 midnight.

27. Rule on rest day based on religious grounds

The employer shall determine and schedule the weekly rest day of the
employees subject to collective bargaining agreement and to such rules
and regulations as the Secretary of Labor and Employment may provide.
However, the employer shall resoect the preference of employees as to
their weekly rest day when such preference is based on religious grounds.
(Art. 91 (b) LC)

28. Illustration on page 423 on rest day

The minimum statutory premium pay rates for the situations

contemplated under Article 93 are as follows:
a. For work performed on rest days or on special holidays, the premium
pay is plus 30% of the daily wage rate of 100% or a total of 130%. Thus, using as
basis Php.382.00 which is the minimum daily wage rate of private sector non-
agricultural workers and employeesin the National capital region, as mandated
by Wage Order No. NCR-14 effevtive on June 14, 2008:

For work performed on rest days or on special holidays - plus 30% of the
daily basic rate of 100% or a total of 130%:
30% of P382 = 0.30 x P382.00 = P114.60
P382.00 + P114.60 = P496.60
or
130% of P382 = 1.3 x P382 = P496.60

b. For work performed on a rest day which is also a special holiday, the
premium pay is plus 50% of the daily wage rate at 100% or a total of 15%. Thus,
using the same P382.00 as basis.

For work performed on a rest day which is also a special day – plus 50% of
the daily basic rate of 100% or a total of 150%:
50% of P382.00 = 0.5 x P382.00 = P191.00
P382.00 + P191.00 = P573.00
or
150% of Php.382.00 = 1.5 x Php382.00 = Php 573.00

29. 7 salient features of the LC

1. It reorients labor laws towards development and employment

goals.
2. It institutionalizes the NLRC. NLRC procedures assure due process.
3. It abolishes the workmen’s compensation system and integrates
workmen’s compensation into the SSS to be administered by the SSS
for private sector and GSIS for the government sector.
4. It establishes an Overseas Employment Development Board and a
National Seamen Board to undertake the systematic employment
of Filipinos overseas and optimize the national benefit therefrom.
5. It implements the provision of theConstitution placing employees of
GOCC’s under the Civil Service and mandating the National
Assembly to standardize their salaries.
6. It ends the wasteful energy-snapping anarchy and opportunism in
the Philippine labor movement by restructuring it by region and by
industry.
7. It abolishes the wage-fixing function of the Wage Commission by
transforming it into a study and research body.
8. It adjusts labor standards laws to the requirements of development
and employment.
 30. General structure of LC

a. The 7 Books composing the Labor Code.

The Labor Code is composed of a Preliminary Title and seven (7) books as
follows:

Preliminary Title
Chapter I – General Provisions (Articles 1 to 6)
Chapter II – Emancipation of Tenants (Articles 7 to 11)
Book I – Pre-Employment (Article 12)
Title I – Recruitment and Placement of Workers
Chapter I – General Provisions (Articles 13 to 24)
Chapter II – Regulation of Recruitment and Placement
Activities (Articles 25 to 35)
Chapter III – Miscellaneous Provisions (Articles 36 to 39)
Title II – Employment of Non Resident Aliens (Articles 40 to 42)

Book II – Human Resources Development Program

Title I – National Manpower Development Program
Chapter I – National Policies and Administrative
Machinery for Their Implementation (Articles 43 to 56)
Title II – Training and Employment of Special Workers
Chapter I – Apprentices (Articles (57 to 72)
Chapter II – Learners (Articles 73 to 77)
Chapter III – Handicapped Workers (Articles 78 to 81)

Book III – Conditions of Employment

Title I – Working Conditions and Rest Periods
Chapter I – Hours of Work (Articles 82 to 90)
Chapter II – Weekly Rest Periods (Articles 91 to 93)
Chapter III – Holidays, Service Incentive Leaves and
Service Charges (Articles 94 to 96)
Title II – Wages
Chapter I – Preliminary Matters (Articles 97 to 98)
Chapter II – Minimum Wage Rates (Articles 99 to 101)
Chapter III – Payment of Wages (Articles 102 to 111)
Chapter IV – Prohibitions Regarding Wages (Articles 112
to 119)
Chapter V – Wage Studies, Wage Agreements and
Wage Determination (Articles 120 to 127)
Chapter VI – Administration and Enforcement (Articles
128 to 129)
Title III – Working Conditions for Special Groups of Employees
Chapter I – Employment of Women (articles 130 to 138)
Chapter II – Employment of Minors (Articles 139 to 140)
Chapter II – Employment of Househelpers (Articles 141
to 152)
Chapter IV – Employment of Homeworkers (Articles 153
to 155)

Book IV – Health, Safety and Social Welfare Benefits

Title I – Medical, Dental and Occupational Safety
 Chapter I – Medical and Dental Services (Articles 156 to
161)
Chapter II – Occupational Health and Safety (Articles
162 to 165)
Title II – Workmen’s Compensation and State Insurance Fund
Chapter I – Policy and Definitions (Articles 166 to 167)
Chapter II – Coverage and Liability (Articles 168 to 175)
Chapter III – Administration (Articles 176 to 182)
Chapter IV – Contributions (Articles 183 to 184)
Chapter V – Medical Benefits (Articles 185 to 190)
Chapter VI – Disability Benefits (Articles 191 to 193)
Chapter VII – Death Benefits (Article 194)
Chapter VIII – Provisions Common to Income Benefits
(Articles 195 to 204)
Chapter IX – Records, Reports and Penal Provisions
(Articles 205 to 208)
Title III – Medicare (Article 209)
Title IV – Adult Education (Article 210)

Book V – Labor Relations

Title I – Policy and Definitions
Chapter I – Policy (Article 211)
Chapter II – Definitions (Article 212)
Title II – National Labor Relations Commission
Chapter I – Creation and Composition (Articles 213 to
216)
Chapter II – Powers and Duties (Articles 217 to 222)
Chapter III – Appeal (Articles 223 to 225)
Title III – Bureau of Labor Relations (Articles 226 to 233)
Title IV – Labor Organizations
Chapter I – Registration and Cancellation (Articles 234
to 240)
Chapter II – Rights and Conditions of Membership
(Article 241)
Chapter III – Rights of Legitimate Labor Organizations
(Article 242)
Title V – Coverage (Articles 243 to 246)
Title VI – Unfair Labor Practices
Chapter I – Concept (Article247)
Chapter II – Unfair Labor Practices of Employers (Article
248)
Chapter III – Unfair Labor Practices of Labor
Organizations (Article 249)
Title VII – Collective Bargaining and Administration of
Agreements (Articles 250 to 259)
Title VII-A – Grievance Machinery and Voluntary Arbitration
(Articles 260 to 262-B)
Title VIII – Strikes and Lockouts and Foreign Involvement in
Trade Union Activities
Chapter I – Strikes and Lockouts (Articles 263 to 266)
Chapter II – Assistance to Labor Organizations (Articles
267 to 268)
Chapter III – Foreign Activities (Articles 269 to 271)
 Chapter IV – Penalties for Violation (Article 272)
Title IX – Special Provisions (Articles 273 to 277)

Book VI – Post Employment

Title I – Termination of Employment (Articles 278 to 286)
Title II – Retirement from the Service (Article 287)

Book VII – Transitory and Final Provisions

Title I – Penal Provisions and Liabilities (Articles 288 to 289)
Title II – Prescription of Offenses and Claims (Articles 290 to
292)
Title III – Transitory and Final Provisions (Articles 293 to 302)

31. Relevant Civil Code, RPC provisions to LC

Civil Code provisions related to Labor Code

Article 1700 in Civil Code provides that the relations between capital and
labor are not merely contractual. They are so impressed with public interest that
labor contracts must yield to the common good. Therefore, such contracts are
subject to the special laws on labor unions, collective bargaining, strikes and
lockouts, closed shop, wages, working conditions, hours of labor and similar
subjects. (Servidad v. NLRC, GR No. 128682, March 18, 1999)
Neither capital nor labor shall act oppressively against the other or impair
the interest or convenience of the public. (Art. 1701, NCC)
The concern of the law for the workers is further stressed in the provision in
the Civil Code which ordains that in case of doubt, all labor legislations and all
labor contracts shall be construed in favor of the safety and decent living for the
laborers. (Art. 1702, NCC)
SC consistently ruled that both the provisions of Art. 1702 of the civil code
and Art. 4 of the labor code which mandate that all doubts shall be resolved in
favor of labor, should be applied in resolving any doubt or ambiguity in contracts
between management and the union. (Plastic town Center Corp. v. NLRC, GR
No. 81176, April 19, 1989)
Civil Code Provisions relevant to Labor:
 Article 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.
 Article 1701. Neither capital nor labor shall act oppressively against the
other, or impair the interest or convenience of the public.
 Article 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
 Article 1703. No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid.
  Article 1704. In collective bargaining, the labor union or members of the
board or committee signing the contract shall be liable for non-fulfillment
thereof.
 Article 1705. The laborer's wages shall be paid in legal currency.
 Article 1706. Withholding of the wages, except for a debt due, shall not be
made by the employer.
 Article 1707. The laborer's wages shall be a lien on the goods manufactured
or the work done.
 Article 1708. The laborer's wages shall not be subject to execution or
attachment, except for debts incurred for food, shelter, clothing and
medical attendance.
 Article 1709. The employer shall neither seize nor retain any tool or other
articles belonging to the laborer.
 Article 1710. Dismissal of laborers shall be subject to the supervision of the
Government, under special laws.
 Article 1711. Owners of enterprises and other employers are obliged to pay
compensation for the death of or injuries to their laborers, workmen,
mechanics or other employees, even though the event may have been
purely accidental or entirely due to a fortuitous cause, if the death or
personal injury arose out of and in the course of the employment. The
employer is also liable for compensation if the employee contracts any
illness or disease caused by such employment or as the result of the nature
of the employment. If the mishap was due to the employee's own notorious
negligence, or voluntary act, or drunkenness, the employer shall not be
liable for compensation. When the employee's lack of due care
contributed to his death or injury, the compensation shall be equitably
reduced.
 Article 1712. If the death or injury is due to the negligence of a fellow worker,
the latter and the employer shall be solidarily liable for compensation. If a
fellow worker's intentional or malicious act is the only cause of the death or
injury, the employer shall not be answerable, unless it should be shown that
the latter did not exercise due diligence in the selection or supervision of
the plaintiff's fellow worker.

RPC provisions related to Labor Code

The Revised Penal Code contains provisions relevant to labor law. For
instance, the penalty of arresto mayor and a fine not exceeding 300 pesos shall
be imposed upon any person who, for the purpose of organizing, maintaining or
preventing coalitions of capital or labor, strike or laborers or lockout of employers,
shall employ violence or threats in such a degree as to compel or force the
laborers or employers in the free and legal exercise of their industry or work, if the
act shall not constitute a more serious offense in accordance with the provisions
of the Revised Penal Code. (Article 289, RPC)
The Revised Penal Code also imposes the penalty of arresto mayor or a fine
ranging from 200 to 500 pesos, or both, upon any person, agent, or officer of any
association or corporation who shall force or compel, directly or indirectly, or shall
knowingly permit any laborer or employee employed by him or by such firm or
corporation, to be forced or compelled, to purchase merchandise or
commodities of any kind.
 The same penalties are imposed upon any person who shall pay the wages
due a laborer or employee employed by him, by means of tokens or objects other
than the legal tender currency of the Philippines, unless expressly requested by
the laborer or employee. (Art. 288, RPC)
Other Relevant Provisions of RPC:
 Article 272. Slavery. - The penalty of prision mayor and a fine of not
exceeding 10,000 pesos shall be imposed upon anyone who shall
purchase, sell, kidnap or detain a human being for the purpose of enslaving
him. If the crime be committed for the purpose of assigning the offended
party to some immoral traffic, the penalty shall be imposed in its maximum
period.
 Article 273. Exploitation of child labor. - The penalty of prision correccional
in its minimum and medium periods and a fine not exceeding 500 pesos
shall be imposed upon anyone who, under the pretext of reimbursing
himself of a debt incurred by an ascendant, guardian or person entrusted
with the custody of a minor, shall, against the latter's will, retain him in his
service.
 Article 274. Services rendered under compulsion in payment of debt. - The
penalty of arresto mayor in its maximum period to prision correccional in its
minimum period shall be imposed upon any person who, in order to require
or enforce the payment of a debt, shall compel the debtor to work for him,
against his will, as household servant or farm laborer.
 Article 278. Exploitation of minors. - The penalty of prision correccional in its
minimum and medium periods and a fine not exceeding 500 pesos shall be
imposed upon:
1. Any person who shall cause any boy or girl under sixteen years of age to
perform any dangerous feat of balancing, physical strength, or
contortion.
2. Any person who, being an acrobat, gymnast, rope-walker, diver, wild-
animal tamer or circus manager or engaged in a similar calling, shall
employ in exhibitions of these kinds children under sixteen years of age
who are not his children or descendants.
3. Any person engaged in any of the callings enumerated in the next
paragraph preceding who shall employ any descendant of his under
twelve years of age in such dangerous exhibitions.
4. Any ascendant, guardian, teacher or person entrusted in any capacity
with the care of a child under sixteen years of age, who shall deliver such
child gratuitously to any person following any of the callings
enumerated in paragraph 2 hereof, or to any habitual vagrant or
beggar.
If the delivery shall have been made in consideration of any price,
compensation, or promise, the penalty shall in every case be imposed
in its maximum period.
In either case, the guardian or curator convicted shall also be removed
from office as guardian or curator; and in the case of the parents of the
child, they may be deprived, temporarily or perpetually, in the discretion
of the court, of their parental authority.
 5. Any person who shall induce any child under sixteen years of age to
abandon the home of its ascendants, guardians, curators, or teachers
to follow any person engaged in any of the callings mentioned in
paragraph 2 hereof, or to accompany any habitual vagrant or beggar.
 Article 291. Revealing secrets with abuse of office. - The penalty of arresto
mayor and a fine not exceeding 500 pesos shall be imposed upon any
manager, employee, or servant who, in such capacity, shall learn the
secrets of his principal or master and shall reveal such secrets.
 Article 292. Revelation of industrial secrets. - The penalty of prision
correccional in its minimum and medium periods and a fine not exceeding
500 pesos shall be imposed upon the person in charge, employee or
workman of any manufacturing or industrial establishment who, to the
prejudice of the owner thereof, shall reveal the secrets of the industry of the
latter.
 Article 310. Qualified theft. - The crime of theft shall be punished by the
penalties next higher by two degrees than those respectively specified in
the next preceding article, if committed by a domestic servant, or with
grave abuse of confidence, or if the property stolen is motor vehicle, mail
matter or large cattle or consists of coconuts taken from the premises of the
plantation or fish taken from a fishpond or fishery, or if property is taken on
the occasion of fire, earthquake, typhoon, volcanic erruption, or any other
calamity, vehicular accident or civil disturbance. (As amended by R.A. 120
and B.P. Blg. 71. May 1, 1980).
 Article 316. Other forms of swindling. - The penalty of arresto mayor in its
minimum and medium period and a fine of not less than the value of the
damage caused and not more than three times such value, shall be
imposed upon: xxx 5. Any person who shall accept any compensation
given him under the belief that it was in payment of services rendered or
labor performed by him, when in fact he did not actually perform such
services or labor.

32. Relevant Constitutional provisions

Article 3 of the Labor Code reflects certain basic principles enshrined in the
constitution aimed at protecting the interest of labor, promoting full employment
and equal work opportunities irrespective of sex, race, or creed. Substantially, it
was based on the provisions of Section 9, Article II of the 1973 Constitution.
Section 3, Article XIII, 1987 Constitution:

“The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in policy
and decision-making processes affecting their rights and benefits as may be
provided by law.

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.

The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns to investments, and to expansion and
growth.”
Other Constitutional Provisions related to Labor Law:

a. “ The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote
full employment, a rising standard of living, and an improved quality of life
for all.” (Section 9, Article II, 1987 Constitution)
b. “The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.” (Section 18, Article II, 1987
Constitution)
c. “The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.” (Section 8, Article III, 1987
Constitution)
d. “The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.” (Section 18 [2], Article III
[Bill of Rights], 1987 Constitution)
e. Section 5, Article VI [The Legislative Department] provides that along with
other sectors, labor is entitled to seats allotted to party-list representatives
for three consecutive terms after the ratification of the Constitution.
f. “No officer or employee of the civil service shall be removed or suspended
except for cause provided by law. (5) The right to self-organization shall not
be denied to government employees. (6) Temporary employees of the
Government shall be given such protection as may be provided by law.”
(Section 2 [3], [5] and [6] of Article IX [B], 1987 Constitution).
g. “The Congress shall provide for the standardization of compensation of
government officials and employees, including those in government-
owned or controlled corporations with original charters, taking into
account the nature of the responsibilities pertaining to, and the
qualifications required for, their positions.” (Section 5, Art. IX (B), 1987
Constitution)
h. “The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of
goods and services produced by the nation for the benefit of the people;
and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.
“The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries
that make full of efficient use of human and natural resources, and which
 are competitive in both domestic and foreign markets. However, the State
shall protect Filipino enterprises against unfair foreign competition and
trade practices.
“In the pursuit of these goals, all sectors of the economy and all region s of
the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their
ownership.” (Section 1, Article XII, 1987 Constitution)
i. “The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help
make them competitive.” (Section 12, Article XII, 1987 Constitution)
j. “The sustained development of a reservoir of national talents consisting of
Filipino scientists, entrepreneurs, professionals, managers, high-level
technical manpower and skilled workers and craftsmen in all fields shall be
promoted by the State. The State shall encourage appropriate technology
and regulate its transfer for the national benefit. The practice of all
professions in the Philippines shall be limited to Filipino citizens, save in cases
prescribed by law.” (Section 14, Article XII, 1987 Constitution)
k. “The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce
social, economic, and political inequalities, and remove cultural inequities
by equitably diffusing wealth and political power for the common good.”
(Section 1, Article XIII, 1987 Constitution)
l. “The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self-
reliance.”(Section 2, Article XIII, 1987 Constitution)
m. “Section 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers who are landless,
to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental,
or equity considerations, and subject to the payment of just compensation.
“Section 5. The State shall recognize the right of farmers, farmworkers, and
landowners, as well as cooperatives, and other independent farmers'
organizations to participate in the planning, organization, and
management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial,
production, marketing, and other support services.
“Section 6. The State shall apply the principles of agrarian reform or
stewardship, whenever applicable in accordance with law, in the
disposition or utilization of other natural resources, including lands of the
public domain under lease or concession suitable to agriculture, subject to
prior rights, homestead rights of small settlers, and the rights of indigenous
communities to their ancestral lands. The State may resettle landless farmers
and farmworkers in its own agricultural estates which shall be distributed to
them in the manner provided by law.
“Section 7. The State shall protect the rights of subsistence fishermen,
especially of local communities, to the preferential use of the communal
 marine and fishing resources, both inland and offshore. It shall provide
support to such fishermen through appropriate technology and research,
adequate financial, production, and marketing assistance, and other
services. The State shall also protect, develop, and conserve such
resources. The protection shall extend to offshore fishing grounds of
subsistence fishermen against foreign intrusion. Fishworkers shall receive a
just share from their labor in the utilization of marine and fishing resources.
“Section 8. The State shall provide incentives to landowners to invest the
proceeds of the agrarian reform program to promote industrialization,
employment creation, and privatization of public sector enterprises.
Financial instruments used as payment for their lands shall be honored as
equity in enterprises of their choice.” (Sections 4, 5, 6, 7 & 8, Article XIII, 1987
Constitution)
n. “The State shall, by law, and for the common good, undertake, in
cooperation with the private sector, a continuing program of urban land
reform and housing which will make available at affordable cost, decent
housing and basic services to under-privileged and homeless citizens in
urban centers and resettlement areas. It shall also promote adequate
employment opportunities to such citizens. In the implementation of such
program the State shall respect the rights of small property owners.”
(Section 9, Article XIII, 1987 Constitution)
o. “The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such
facilities and opportunities that will enhance their welfare and enable them
to realize their full potential in the service of the nation.” (Section 14, Article
XIII, 1987 Constitution)
p. “The State shall, provide adult citizens, the disabled, and out-of-school
youth with training in civics, vocational efficiency, and other skills.” (Section
2 [5], Article XIV, 1987 Constitution)
q. “The State shall, from time to time, review to increase the pensions and
other benefits due to retirees of both the government and the private
sectors.” (Section 8, Article XVI, 1987 Constitution)

33. Rule of interpretation of LC

a. Doubts should be resolved in favor of labor.

Article 4 of the Labor Code enunciates the time-honored principle that all
doubts in the implementation and interpretation of its provisions should be
resolved in favor of labor. (Asian Transmission Corporation v. CA, GR No. 144664,
March 15, 2004)

This rule applies not only in the interpretation of the provisions of the Labor
Code but also of its Implementing Rules. (Article 4, Labor Code; Section 3,
Preliminary Provisions, Rules to Implement the Labor Code)

It is in keeping with the constitutional mandate of promoting social justice

and affording protection to labor. (Manila Electric Company v. NLRC, GR No.
78763)
 Thus, when conflicting interests of labor and capital are to be weighed on
the scales of social justice, the heavier influence of the latter should be counter-
balanced by sympathy and compassion the law must accord the
underprivileged worker. (Marcopper Mining Corporation v NLRC, GR No. 103525)
b. Civil Code provisions related to Article 4 of the Labor Code.

Article 10 of the Civil Code states: “In case of doubt in the interpretation or
application of laws, it is presumed that the law-making body intended right and
justice to prevail.”

More specifically, Article 1702 of the Civil Code directs that: “In case of
doubt, all labor legislation and all labor contracts shall be construed in favor of
the safety and decent living of the laborer.” (PNCC v. NLRC, GR No. 101535, Jan.
22, 1993, 217 SCRA 455)

Compared to the provision of Article 4 of the Labor of the Labor Code, it

appears that Article 1702 is broader in scope in that it pertains to “all labor
legislation and all labor contracts” and not merely to the “implementation and
interpretation of the provisions of the Labor Code, including its implementing rules
and regulations,” as enunciated in Article 4. Moreover, the Civil Code mentions a
standard which would justify the invocation of the rule of interpretation in favor of
labor in that the same should be done “in favor of the safety and decent living
for the laborer.”

Having made such observation, it may well be said that the provisions of
the Civil Code and the Labor Code do not really differ since the policy of the law
is clear – any doubt should always be interpreted or construed in favor of labor –
which means, in more specific terms, the safety and decent living for the laborer.
(PNCC v NLRC, GR No. 101535)
c. Rule of interpretation embodied in the law itself

The Labor Code is one of the few laws which mandates the appropriate
rule of interpreting its provisions. This is one unique feature of the Labor Code. From
the inception of a legal controversy or case, labor has already an upper hand
over the employer. Once the doubt is not effectively overturned by clear and
convincing evidence expected to be propounded by the employer which, in
most cases, has the burden of proof, the controversy should, by clear directive of
the law, be decided in favor of labor.

This is, of course, not a harsh rule. The framers of the law (Labor and the Civil
Code) had fully taken cognizance of the disparity in terms of resources and
standing between labor and capital. In any legal controversy between them, the
former always suffers the most. Hence, the common adage that those who have
less in life should have more in law is best exemplified and made real in Articles 4
and 1702 of the Labor Code and Civil Code, respectively. The worker must look
up to the law for his protection. The law regards him with tenderness and even
favor and always with faith and hope in his capacity to help in shaping the
nation’s future. He must not be taken for granted. (Cebu Royal Plant [San Miguel
Corp] v Minister of Labor, GR No. 58639)
Certainly, this rule of interpretation and construction in favor of labor does
not mean that the capital or employer should, at all times, be at the losing end of
a controversy. The law does not say so. For while the Constitution and the law
tend to favor the working man, protection to the employer is assured. Protection
of the rights of the laborer authorizes neither the oppression nor self-destruction of
the employer. While the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be supposed that every
labor dispute will be automatically decided in favor of labor. Management also
has its own rights, which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privilege in life, the
Supreme Court has inclined more often than not towards the worker and upheld
his cause with his conflicts with the employer. Such favoritism, however, has not
blinded the court to rule that justice is, in every case, for the deserving, to be
dispensed in the light of the established facts and applicable law and doctrine.
(Rolando Revidad v NLRC and Atlantic, Gulf and Pacific Company of Manila, Inc.,
GR No. 111105)

The Supreme Court, in Philippine Long Distance Telephone Co. v NLRC,

underscored that although it is bound by the social justice mandate of the
Constitution and the laws, however, such policy of social justice is not intended to
countenance wrongdoing.
Doubt or Ambiguity in Labor Contracts

In case of doubt or ambiguity, labor contracts should be interpreted

liberally in favor of the worker. (Ditan v POEA, GR 79560)
Doubt or Ambiguity in Evidence

The rule enunciated in Art 4 of the Labor Code likewise applies in the
appreciation of evidence in labor proceedings. Consequently, when there is a
doubt between the evidence presented by the employer and the employee,
such doubt should be resolved in favor of the latter. (Ph Employ Services and
Resources, Inc. Paramio, GR No 144786)
When Rule in Article 4 does not apply

The provision that in case of doubt in the interpretation of the provisions of

the Labor Code, the doubt should be resolved in favor of the laborer does not
apply where the pertinent provisions of the Labor Code leave no room for doubt
either in their interpretation or application. (Bonifacio v GSIS, GR 62207)

34. 1702 CC vs Art. 4 LC

Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak
on the rule on interpretation and construction of law and labor contracts.

Art 1702 of the Civil Code provides:

“Article 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
“

Article 4 of the Labor Code states:

 “Article 4. Construction in favor of labor. All doubts in the implementation
and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor.”

Both articles above may be applied to doubts and ambiguities in

1. Labor contracts such as an employment contract or a CBA
2. Evidence presented in labor cases

This rule applies not only in the interpretation of the provisions of the Labor Code
but also of its Implementing Rules. It applies to all workers - whether in the
government or in the private sector- in order to give flesh and vigor to the pro-
poor and pro-labor provisions of the Constitution.

It is in ·keeping with the constitutional. mandate of promoting social justice and

affording protection to labor. Thus, when conflicting interests of labor and
capital are to be weighed on the scales of social justice, the heavier influence
of the latter should be counter-balanced by sympathy and compassion the law
must accord the underprivileged worker.

Compared to the provision of Article 4 of the Labor Code, it appears that Article
1702 is broader in scope in that it pertains to "all labor legislation and all labor
contracts" and not merely to the "implementation and interpretation of the
provisions of the Labor Code, including its implementing rules and regulations,"
as enunciated in Article 4. Moreover, the Civil Code mentions a standard which
would justify the invocation of the rule of interpretation in favor of labor in that
the same should be done "in favor of the safety and decent living for the
laborer."

DOUBT OR AMBIGUITY IN LABOR CONTRACTS.

In case of doubt or ambiguity, labor contracts should be interpreted liberally in
favor of the worker. Article 1702 of the Civil Code and Article 4 of the Labor
Code should be applied in resolving such. doubt or ambiguity in contracts
between management and the union. Contracts which are not ambiguous are
to be interpreted according to their literal meaning and not beyond their
obvious intendment.5 In Colegio de San Juan de Letran - Calarnba v. Villas/ the
Supreme Court re-affrrmed the rule that the ambiguity in labor contracts should
be strictly construed against whoever is the author thereof.'

DOUBT OR AMBIGUITY IN EVIDENCE.

The rule emmciated in Article 4 of the Labor Code likewise applies in the
appreciation of evidence in labor proceedings. Consequently, when there is a
doubt between the evidence presented by the employer and the employee,
such doubt should be resolved in favor of the latter.1 Time and again, the
Supreme Court has pronounced that "if doubt exists between the evidence
presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter." The policy is to extend the doctrine to a greater
number of employees who can avail themselves of the benefits under the law,
which is in consonance with the avowed policy of the State to give maximum
aid and protection to labor.
 35. When rule does not apply (Art. 4 LC)

The provisions that in case of doubt in the interpretation of the provisions of

the Labor Code, the doubt should be resolved in favor of the laborer does
not apply where the pertinent provisions of the labor code leave no room
for doubt either in the interpretation or application.

* When there is no doubt and its stead, there is clear evidence that an
employee is not an asset to the management but a liability that delays
production and sets a bad example to his co-workers, the SC will not only
concur in his dismissal but will insist in an order to that effect.

*while no doubt, it must still protect the right of the employer to exercise whar
are clearly management prerogative.
*law imposes great burneds on the employer.

36. Nature and limitation of the rule making power

a. Power to promulgate implementing rules and regulations

-Administrative bodies like the DOLE are granted under the law the power
and authority to issue administrative rules, regulations and policies to
implement and interpret the law which they are entrusted to enforce. It is
an elementary rule in administrative law that such administrative rules,
regulations and policies have the force and effect of law and are entitled
to great respect.

 Venture of powers to administrative bodies is not unconstitutional,

unreasonable and oppressive but has been necessitated by the
growing complexity of modern society to help in the regulations of
society’s ramified activities.

b. Implementing rules and regulations must not conflict with law.

1. It is a basic legal tenet that the rules and regulations issued by
administrative bodies should not be in conflict with or contrary to the
provisions of the law they seek to implement or enforces.
2. The grant of authority to the DOLE & other gov’t agencies charged with
the administration and enforcement of the LC or any of it’s parts, to
promulgate the necessary implementing rules and regulation, is not
unlimited.
3. The Sec of Labor and Employment has no legal power to amend or alter
in any material sense whatever the law (LC) itself unequivocally specifies
or fixes.
4. The rule making power should be confined to details for regulating the
mode or proceeding to carry into effect the law and it has been
enacted. The power cannot be extended to amending or expanding the
statutory requirements or to embrace matters not covered by the
statute. Rules that subvert the statute cannot be sanctioned.
 37. Rule on publication

As stated, laws in the Philippines take effect after 15 days following the
completion of their publication either in the Official Gazette or in a newspaper
of general circulation in the Philippines.

However, the law may provide that it is effective immediately upon publication,
or that will be effective on a particular date.
As for the Labor Code,

ART. 2. Date of effectivity. - This Code shall take effect six (6) months after its
promulgation.

38. Applicability of LC; excepted worker 1-4 enumeration

Article 6 of Labor Code. Applicability. All rights and benefits granted to workers
under this Code shall, except as may otherwise be provided herein, apply alike
to all workers, whether agricultural or non-agricultural. (As amended by
Presidential Decree No. 570-A, November 1, 1974)
Exceptions:
Employees not covered:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic servants and persons in the personal service of another;
e. Workers paid by results;
f. Non-agricultural field personnel; and
g. Members of the family of the employer.

39. 4 test of er-ee relationship (explain each)

To ascertain the existence of an employer-employee relationship[,]

jurisprudence has invariably adhered to the four-fold test, to wit:

1) the selection and engagement of the employee;

The employer must generate a prioritized list of job requirements including
special qualifications, characteristics, and experience wanted from a
candidate. power to select and engage, the circumstance likewise
rendered concomitant the power of the employer to dismiss.
 2) the payment of wages;

"Wage" paid to any employee shall mean the remuneration or earnings,

however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, commission basis, or
other method of calculating the same, which is payable by an employer to
an employee under a written or unwritten contract of employment for work
done or to be done or for services rendered or to be rendered, and includes
the fair and reasonable value, as determined by the Secretary of Labor,

3) (3) the power of dismissal; -It Must be done for authorized or just causes
only. An employer shall observe procedural due process before
terminating one’s employment.

4) the power to control the employee's conduct, or the so-called "control

test."

The employer reserves the right to control not only the end achieved but
also the manner and means used to achieve that end.

40. Two tiered test of ee-er (explain each)

While the control test may be the most important index to determine the existence of
the employer-employee relationship, however, in certain cases, the control test is not
sufficient to give a complete picture of the relationship between the parties.

Thus, the Supreme Court in Francisco v. NLRC, enunciated that the better
approach would, therefore, be to adopt a two-tiered test involving:

1. Control Test – It is the putative employer’s power to control the employee

with respect to the means and methods by which the work is to be
accomplished
2. Economic Reality Test – It is the underlying economic realities of the activity or
relationship. Here, the proper standard of economic dependence is whether
the worker is dependent on the alleged employer for his continued
employment in that line of business.

This is especially appropriate in cases where there is no written agreement or

terms of reference to base the relationship on and due to the complexity of the
relationship based on the various positions and responsibilities given to the worker over
the period of the latter’s employment.

Thus, the determination of the relationship between the employer and the
employee depends upon the circumstances of the whole economic activity

41. Cases where er-ee exist; does not exist

Employment relationship exists in the following cases:

1. Carpenters and maintenance personnel – a person who is engaged in

maintenance and repair jobs and perform carpentry, plumbing, electrical
and masonry work for apartments and residential buildings owned by the
employer.
2. Dispatchers of a transportation company – as between the operator of a
transportation company and the dispatches hired by one of his employees
3. Janitors – following the right of control test, the fact that the person in charge
of the school supervised the janitor in his work and had control over the
method and manner by which he performed his job
4. Messengers – the messengers who were supplied by a service agency and
who were required to work in the premises of the agency’s client and were
paid their salaries through the service agency are employees of said client.
The client company controlled the performance of the duties of the
messenger.
5. Security guards – security guards by the security agency to its client company
are the employees of said agency.
6. Professors and instructors – professors and instructors are not independent
contractors but are employees in that their work is controlled by their
employer – the university.
7. Jeepney drivers and conductors – under the “boundary system” the
relationship between the driver and conductor of a bus and the owner
thereof is not that of a lessee and lessor but that of employee and employer.
The management of the business is in the owner’s hands.
8. Taxi drivers – same as #7
9. Auto-calesa driver and bus driver – same as #7
10. Musicians – musicians who were employed by a company producing motion
pictures for purposes of making music recordings, without which the motion
picture is not complete, are employees.
11. Fishermen – fishermen-crew who rendered services in various capacities
aboard the fishing vessels of a company and whose compensation was paid
in cash on percent commission basis, are employees following the right of
control test.
12. Stevedores – although supplied to the company by the labor organization,
are employees of the company
13. Lawyers, doctors, nurses, dentists, public relations practitioners and other
professionals – a lawyer may very well be an employee of a private
corporation or even of the government. A similar arrangement may exist as
to doctors, nurses, dentists, public relations practitioners, and other
professionals
14. Resident physicians – there is employer-employee relationship between
resident physicians and the training hospitals unless:
a. There is a training agreement between them; and
b. The training program is duly accredited or approved by the
appropriate government agency
15. Employees of cooperatives – as long as the four elements of employer-
employee relationship are present (i.e. they work under the supervision of the
cooperative manager and worked on regular working hours)
16. Insurance agent – an insurance agent is an employee of the insurance
company
 Employment relationship does not exist in the following cases:

1. Commission salesman
2. Contract of agency
3. Working scholars
4. Medical consultants and visiting physicians
5. Independent contractors or their employees
6. Persons rendering caddying services to club members

42. Cases where er-ee relationship is suspended

1. In case of preventive suspension – where an employee is undergoing

an administrative investigation for an offense and his presence in the
company premises poses serious or imminent threat to the life or
property of the employer or of his co-employees
2. In case of imposition of suspension as a form of disciplinary penalty –
on an employee who is found guilty of committing a wrongful act
under Article 282 of the Labor Code or under the Company Rules and
Regulations
3. During off-season in case of regular seasonal employment – such that
during off-season, they are temporarily laid off but they are re-
employed during the season or when their services may be needed
4. Under the following circumstances in Article 286 of the Labor Code:
a. Bona fide suspension by the employer of the operation of his
business or undertaking for a period not exceeding six (6) months;
b. Fulfillment by the employee of a military duty; or
c. Fulfillment by the employee of a civic duty

43. Termination of employment (er,ee, gov’t, automatic)

Termination of Employment by the Employer

A. Just Cause
1. Serious misconduct or willful disobedience by the employee (Ee) of the
lawful orders of his employer (Er) or representative in connection with his
work
2. Gross and habitual neglect by the Ee of his duties
3. Fraud or willful breach by the Ee of the trust reposed in him by his Er or
duly organized representative
4. Commission of a crime or offense by the Ee against the person of his Er or
any immediate member of his family or his duly authorized
representative.
5. Other causes analogous to the foregoing

B. Authorized Causes

1. Installation of labor‐saving devices (automation/robotics)

 2. Redundancy (superfluity in the performance of a particular work) – exists
where the services of an employee (Ee) are in excess of what is
reasonably demanded by the actual req’ts of the enterprise.
Note: The redundancy should not have been created by the Er.
3. Reorganization
Note: An Er is not precluded from adopting a new policy conducive to a
more economical and effective management, and the law does not
require that the Er should be suffering financial losses before he can
terminate the services of the employee on the ground of redundancy
4. Retrenchment – cutting of expenses and includes the reduction of
personnel; It is a management prerogative, a means to protect and
preserve the Er’s viability and ensure his survival. To be an authorized
cause it must be affected in good faith (GF) and for the retrenchment,
which is after all a drastic recourse with serious consequences for the
livelihood of the Ee’s or otherwise laid‐off.

Note: The phrase “to prevent losses” means that retrenchment or

termination from the service of some Ees is authorized to be undertaken
by the Er sometime before the anticipated losses are actually sustained
or realized. Evidently, actual losses need not set in prior to retrenchment.
5. Closing or cessation of operation of the establishment or undertaking –
must be done in good faith and not for the purpose of circumventing
pertinent labor laws.
6. Disease – must be incurable within 6 months and the continued
employment is prohibited by law or prejudicial to his health as well as to
the health of his co‐Ees with a certification from the public health officer
that the disease is incurable within 6 months despite due to medication
and treatment

Termination by the Employee

 Resignation
General rule: Written notice to resign submitted one (1) month in
advance
Exception: No notice required for any of the following:
(1) Serious insult by the employer or his representative on the honor and
person of the employee;
(2) Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
(3) Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the
immediate members of his family; and
(4) Other causes analogous to any of the foregoing.

44. Elements of recruitment & placement of workers (3)

Elements of illegal recruitment:

a. First element: Recruitment and placement activities.

Any act of CETCHUP (canvassing, enlisting, contracting, transporting,

utilizing, hiring, or procuring workers) and includes CRAP (referring,
 contract services, promising or advertising for employment abroad),
whether for profit or not, when undertaken by a non-licensee or non-
holder of authority: Provided, That any such non-licensee or non-holder
who, in any manner, offers or promises for a fee employment abroad to
two or more persons shall be deemed as engaged in such act.

b. Second element: Non-licensee or non-holder of authority - means any

person, corporation or entity which has not been issued a valid license or
authority to engage in recruitment and placement by the Secretary of
Labor and Employment, or whose license or authority has been
suspended, revoked or canceled by the POEA or the Secretary of Labor
and Employment.

45. Distinctions bet. PEA & PRE

Private Employment Agency refers to any person or entity engaged in recruitment

and placement of workers for a fee which is charged, directly or indirectly, from
the workers or employers or both. Private Recruitment Entity refers Any person or
association engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee.

PEA is issued a license while a PRE is issued an authority.

46. OFW in distress, meaning

 An OFW in distress is an overseas Filipino employee who has medical or

psycho-social problems requiring treatment, hospitalization, and/or
counseling; and/or problems like labor, immigration and other issues
requiring legal representation as defined by R.A. 8042 and may need to be
repatriated to the Philippines.

47. Documented vs undocumented workers

 Regular or documented migrant workers are those employed in another

country with the requisite legal documents, like valid passports and work
permits. Their rights are protected under international law and their safety
and well-being protected from any exploitation or abuse.

 Undocumented workers are foreign-born workers who lack the legal

documentation required to work in the country in which they live. These
workers, like others, working and living in a country illegally, are often
referred to as “illegal aliens,” or “illegal immigrants.” In the case of Filipino
overseas workers, these are Filipinos who are not properly documented or
without valid residence or work permits, or who may be overstaying their
visa. Usually, the rights of these undocumented worker are unprotected
 and prone to abuse, their safety and well-being are not guarded from any
exploitation.

48. What is PESO (RA 8759)

 Pursuant to RA 8759, the law requires the establishment of a “public

employment service office” in capital towns, cities, and other strategis
areas. A PESO is intended to serve as employment service and information
center in its area of operation. It regularly obtains lists of job vacancies from
employers, publicizes them, invites and evaluates applicants, and refers
them for probable hiring. It also provides training and educational
guidance and employment counselling services.

49. Nationality of Er not material

Foreign employer shall assume joint and solidary liability with the local employer
for all claims and liabilities which may arise in connection with the
implementation of contract, including but not limitied to payment of wages,
death and disability compensation and repatriation. the purpose of solidary
liability is to assure aggrieved workers of immediate and sufficient payment of
what is due to them (Osm Shipping Inc. v. Nlrc)

50. Rules on repatriation (a-h)

SECTION 214.Repatriation Procedures. —

A) In case a request for repatriation is filed by an Overseas Filipino Worker at POLO,

the Labor Attaché and/or Welfare Officer shall evaluate the request. Should there
be a need for the immediate repatriation of the Overseas Filipino Worker, the
Labor Attaché shall notify the principal/employer about the request for
repatriation. If the principal/employer fails or refuses to provide for the ticket or
costs thereof, the Labor Attaché shall notify the OWWA and the POEA
simultaneously of such need to repatriate. In case the request is received or filed
at the POEA, the POEA shall immediately notify the principal/employer, the
licensed recruitment agency, and the POLO, of such request.

B) The POEA shall immediately issue a notice requiring the licensed recruitment
agency to provide, within forty eight (48) hours from such notice, the plane ticket
or the prepaid ticket advice (PTA) to the POLO or Philippine Embassy. The licensed
recruitment agency shall notify the POEA of such compliance, which shall then
inform OWWA of the action of the licensed recruitment agency. If the licensed
recruitment agency fails to provide the ticket or PTA within forty-eight (48) hours
from receipt of the notice, the Administration shall suspend the documentary
processing of the licensed recruitment agency or impose such other sanctions as
it may deem necessary.

C) In case the repatriation of the Overseas Filipino Worker is dependent upon the
issuance of an exit visa/clearance, the principal/employer shall have fifteen (15)
days from notice to secure such exit visa. The licensed recruitment agency which
recruited and/or deployed said worker shall exert earnest efforts in coordinating
with the principal/employer to ensure the issuance of said visa.

D) When the repatriation is dependent upon the issuance of an exit visa and the
principal/employer fails to secure the exit visa within a period of fifteen (15) days
from receipt of the POEA notice, the Administration shall suspend the
principal/employer from participating in the overseas employment program. In
the same manner, where the licensed recruitment agency, despite issuing the PTA
for the repatriation of the Overseas Filipino Worker, does not exert earnest efforts
in coordinating with the principal/employer to ensure the issuance of said visa,
the Administration shall suspend the documentary processing of the licensed
recruitment agency.

E) Upon request, the Administrator may issue an Order lifting the suspension of
documentary processing only upon compliance with the directive for which the
Order of suspension of documentary processing was issued.

F) When those primarily responsible for the repatriation fail to fulfill their obligations,
the Administration shall notify OWWA to advance the costs of repatriation with
right of reimbursement against the licensed recruitment agency or
principal/employer. The OWWA shall notify the POEA of the arrival of the
repatriated Overseas Filipino Worker. It shall likewise notify the agency that has
the obligation to repatriate the Overseas Filipino Worker and demand payment,
within fifteen (15) days from notice, of the costs it has advanced for the
repatriation of the Overseas Filipino Worker, including legal interest in case of
default. In case the licensed recruitment agency fails to reimburse the OWWA,
the latter may recommend to the POEA the imposition of suspension of
documentary processing. The POEA will direct the licensed recruitment agency
to settle its obligation with the OWWA within ten (10) days from notice.
Noncompliance with the directive of the POEA shall result in the suspension of
documentary processing. 63 The suspension of documentary processing imposed
against the licensed recruitment agency and the principal/employer shall be
lifted by the Administration only upon clearance by the OWWA

SECTION 216.Emergency repatriation. — The OWWA, in coordination with DFA,

and in appropriate situations, with international agencies, shall undertake the
repatriation of Overseas Filipino Workers in cases of war, epidemic, disasters or
calamities, natural or man-made, and other similar events, without prejudice to
reimbursement by the responsible principal/employer or licensed recruitment
agency within sixty (60) days from notice. In such cases, the POEA shall
simultaneously identify and give notice to the licensed recruitment agencies
concerned, copy furnished the corresponding insurance companies. SECTION
217.Mandatory Repatriation of Underage Overseas Filipino Worker. — Upon
discovery or upon being informed of the presence of an Overseas Filipino Worker
whose actual age falls below the minimum age requirement for overseas
deployment, the responsible officers in the foreign service shall, without delay,
repatriate the said Overseas Filipino Worker and advise the DFA through the
fastest means of communication available of such discovery and other relevant
information

51. 4 requisites of Sec. 4 RA 8042

 SEC. 4. Deployment of Migrant Workers – The State shall deploy overseas Filipino
workers only in countries where the rights of Filipino migrant workers are
protected. The government recognizes any of the following as guarantee on the
part of the receiving country for the protection and the rights of overseas Filipino
workers:

(a) It has existing labor and social laws protecting the rights of migrant
workers;

(b) It is a signatory to multilateral conventions, declaration or resolutions

relating to the protection of migrant workers;

(c) It has concluded a bilateral agreement or arrangement with the

government protecting the rights of overseas Filipino workers; and

(d) It is taking positive, concrete measures to protect the rights of migrant

workers.

52. Nature of employment of OFWs (a-i)

a. OFW’s can never acquire regular employment

- OFW’s are contractual, NOT REGULAR
Related cases:
1. Brent School Inc. v Zamora (G. R. No. 48494, February 5, 1990, 181 SCRA 702)
- Seamen (now Seafarers) and overseas contract workers are NOT
COVERED by the term “regular employment” as defined in Article 280 of
the Labor Code;

2. Coyoca v. NLRC (G. R. No. 113658, March 31, 1995, 240 SCRA 190, 194)
- Employment of Filipino Seamen is governed by the Rules and
Regulations of the POEA. The Standard Employment Contract governing
the Employment of All Filipino Seamen on Board Ocean-Going Vessels
of the POEA, particularly Part 1, Sec. C which provides that contract of
Seamen shall be for a fixed period, shall not be longer than twelve (12)
months;

3. Millares v. NLRC (G. R. No. 110524, July 29, 2002, 385 SCRA 306)
- OFW’s cannot acquire regular employment, the fact that employment
of seafarers is governed by the contracts they sign everytime they are
re-hired and their employment is terminated when the contract expires;
- Employment is fixed for a certain period of time;
- They fall under the exception of Art. 280 whose employment has been
fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of engagement of the
employee or where the work or service to be performed is seasonal in
the nature and the employment is for the duration of the season.
 -
b. Indefinite Period of Employment of OFW’s held NOT VALID
Pentagon international Shipping, Inc. v Adelantar (G. R. No. 157373, July 27,
2004)
- Even if the employment contract of an OFW provides for an unlimited
period, it is not valid as it contravenes the explicit provision of the POEA
Rules and Regulations on fixed-period employment
-
c. OFW’s do not become regular employees by reason of nature of work
An OFW cannot be considered a regular employee by reason of the fact
that the work he performs is usually necessary and desirable in the usual business
or trade of the employer.
1. Millares v. NLRC (G. R. No. 110524, July 29, 2002, 385 SCRA 306)
4. Petitioners Claim: they be considered as regular employees since they are
performing useful and desirable works and that they have rendered 20
years of service; in Brent School Inc. v Zamora (G. R. No. 48494, February 5,
1990, 181 SCRA 702) Ruling, there are certain forms of employment which
also require the performance of usual and desirable functions and which
exceed one year but do not necessarily attain regular employment status;
OFWs and seafarers fall under this type of employment which are governed
by mutual agreement of the parties.

d. Regular employment does not result from the series of re-hiring of OFWs
- Gu-Miro v. Adorable (G. R. No. 160952, August 20, 2004); continued re-
hiring by the company of the OFW to serve as Radio Officer on board the
employer’s different vessels should be interpreted not as a basis of
regularization but rather as a series of contract renewals.
e. Unique cases where OFWs were declared regular employees
ATCI Overseas Corp. v CA (G. R. No. 143949, August 9, 2001); OFWs may
attain regularity of employment. Here the Filipino doctors were hired by the
Ministry of public health of Kuwait for a period of two years but were
summarily terminated after 2 months on the ground that they are physically
unfit for the job. After seven months they had ceased to work, they were
repatriated to the Philippines. They claimed that they are probationary
employees at the time of their termination. Supreme Court said they are
regular employees because of the following reasons:

1. there is nothing in the record that shows and proves that they are
probationary employees at the time they were dismissed from
employment;
2. there is no stipulation included in the employment contract and
Memorandum of Understanding of the petitioner and the Ministry
providing for a probationary period;
3. there’s no finding of probationary employment in the decisions of POEA,
NLRC and CA;
 4. petitioners were not apprised of the fact that they were to be placed
on a probationary period;
(this decision was reversed: OFWs can never become regular
employees as their engagement is required under the law to be on a
fixed-term basis, Millares v. NLRC GR No. 110524)
F . The fixed –period employment of OFWs not discriminatory
- not discriminatory against them nor does it favor foreign employers
(particularly seafarers); seafarers nature of employment are peculiar
and unique, they cannot stay for a long and indefinite period of time at
sea; national, cultural and lingual diversity necessitates the limitation of
its period.

g. The expiration of employment contracts of OFWs marks its ending

- since OFWs are not regular employees, their employment ceases upon
the expiration of their employment contracts
h. Effect of hiring of seamen for overseas employment but assigning him to local
vessel
- The non-deployment of the ship overseas does not affect the validity of
the perfected employment contract (OSM Shipping Philippines Inc. v NLRC
GR No. 138193, March 5, 2013);
i. Effect on the status of a seaman hired for overseas deployment but later
assigned to domestic operations after the expiration of his overseas contract
- the employee is considered now as a domestic employee (his overseas
employment is automatically terminated upon expiration of his overseas
employment contract) Delos Santos v, jebsen Maritime, Inc. GR No. 154185

53. Termination of OFWs (a-c)

a. OFWs deserve to be protected by our laws

Most OFWS come from the poorest sector of the society, they are hardly
illiterate and of ill-health.

- Their unfortunate circumstance makes them easy prey to avaricious

employers. They will climb mountains, cross the seas, endure slave
treatment in foreign lands just to survive. They will work under sub-human
conditions and accept salaries below the minimum
- No one should be made to unjustly profit from their sufferings
b. The due process mandated under Philippine Law applies to dismissal of OFWs

- In the absence of proof of the applicable laws of the foreign employer,

Labor Code Provisions will govern the termination of employment of OFWs;

- As vital component of due process, twin requirement of Notice and

hearing should strictly be effected;
c. Award of Indemnity in the form of Nominal Damages in case of dismissal of
OFWs for just authorized cause but without due process

54. Awards of indemnity (Agabon case)

- The Agabon v. NLRC Case: the dismissal for a just cause but without due
process is not illegal or ineffectual, but legal; however, the employer SHOULD
INDEMNIFY THE EMPLOYEE WITH NOMINAL DAMAGES FOR NON-COMPLIANCE WITH
STATUTORY DUE PROCESS.

55. Monetary awards to OFWs (a-k)

a) The reliefs under Art. 279 of the Labor Code are not available to OFWs.
- Any and all claims arising from the employment of OFWs, including those
for death or illness compensations, are not rooted from the provisions of
the Labor Code.
- It is Section 10 of RA No. 8042 (Migrant Workers and Overseas Filipinos
Act of 1995) and not Art. 279 of the Labor Code, which is appropriate
legal basis for such claims.
- The remedies provided for under Art. 279 such as reinstatement or
separation pay in lieu of reinstatement or full backwages, are not
available to OFWs. This is as it should be since OFWs are contractual
employees whose rights and obligations are governed primarily by the
POEA Standard Employment Contract (POEA-SEC), the Rules and
Regulations Governing Overseas Employment and more importantly, by
said RA no. 8042.
b) A validly dismissed OFW is not entitled to his salary for the unexpired portion
of his employment contract.
- However, if he is dismissed without observance of procedural due
process, he is entitled to an indemnity I the form of nominal damages.
c) How to reckon the monetary awards to OFWs illegally dismissed prior to the
effectivity of RA 8042
- Effectivity of RA 8042 is on August 25, 1995 and approved on June 7,
1995
- Entitled to the payment of their salaries corresponding to the unexpired
portion of their fix-term contract even without the qualification now
found in Section 10 of said law.
d) Qualification in par.5, Section 10 of RA 8042 declared unconstitutional
(Serrano Doctrine)
- In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be
entitled to the full reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) months for every year
of the unexpired term, whichever is less.
 - The subject clause “or for three (3) months for every year of the
unexpired term, whichever is less” is declared unconstitutional for being
discriminatory, among other significant reasons cited therein.
Consequent to this ruling, illegally dismissed OFWs are now entitled to all
the salaries for the entire unexpired portion of their employment
contracts, irrespective of the stipulated term or duration thereof. (In
other words, the SC reverted to the old rule prior to effectivity of RA No.
8042)
- The SC ruled concluded that the subject clause contains a suspect
classification in that, in the computation of the monetary benefits of
fixed term employees who are illegally discharged, it imposes a 3-month
cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of OFWs or local workers with
fixed-term employment. The subject clause singles out one classification
of OFWs and burdens it with a peculiar disadvantage.
e) Monetary award to OFW is not in the nature of separation pay or
backwages but a form of indemnity
- The award of salaries for the unexpired portion of an OFW’s employment
contract is not an award of backwages or separation pay but a form of
indemnity for the OFW who was illegally dismissed.
f) Only salaries are to be included in the computation of the amount due for
the unexpired portion of the contracts
- Allowances are excluded. There is no basis in including the OFW’s living
allowance as part of the three months salary to which he is entitled
under Section 10 of RA 8042.
- There is likewise no basis to include overtime, holiday and leave pay in
the said computation.
g) Entitlement to overtime pay of OFW
- The criterion in determining whether or not sailors are entitled to overtime
pay is not whether they are on board and cannot leave ship beyond
regular 8 working hours a day but whether they actually rendered service
in excess of said number of hours.
h) Reimbursement of placement fee included in the monetary award to an
OFW
- An illegally dismissed OFW is entitled to the full reimbursement of the of
his placement fee with 12% interest per annum.
i) Costs of repatriation and transport of personal belongings should be
included in the monetary award to an illegally dismissed OFW
- Under Section 15 of RA 8042, the repatriation of OFW and the transport
of his personal belongings are the primary responsibilities of the agency
which recruited or deployed him. All the costs attendant thereto should
be borne by the agency concerned and/or its principal.
j) Right to recover cost of repatriation from OFW’s wages
- The right of the employer to recover cost of repatriation from the OFW’s
wages an earnings hinges on whether the OFW was legally dismissed or
not. The right exists if OFW is validly discharged for disciplinary measures.
k) Effect of Unauthorized substitution or alteration of POEA-approved
employment contract
- RA 8042 explicitly prohibits the substitution or alteration to the prejudice
of the worker, of employment contracts already approved and verified
 by the POEA from the time of the actual signing thereof by the parties
up to and including the period of their expiration without the approval
of the POEA.

56. Indemnity for OFWs not separation pay or backwages

A seafarer is not a regular employee as defined in Article 280 of the Labor Code.
Hence, he is not entitled to full backwages and separation pay in lieu of
reinstatement as provided in Article 279 of the Labor Code. Seafarers are
contractual employees whose rights and obligations are governed primarily by
the POEA Standard Employment Contract for Filipino Seamen, the Rules and
Regulations Governing Overseas Employment, and, more importantly, by
Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of
1995. While the POEA Standard Employment Contract for Filipino Seamen and the
Rules and Regulations Governing Overseas Employment do not provide for the
award of separation or termination pay, Section 10 of R.A. 8042 provides for the
award of money claims in cases of illegal dismissals.

The award of salaries for the unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term, whichever is less, is not an
award of backwages or separation pay, but a form of indemnity for the worker
who was illegally dismissed. The Labor Arbiter may have mislabeled it as
separation pay, nonetheless, the award was made in conformity with law.

57. Entitlement of OFWs of damages & attorney’s fees

A. Entitlement of OFWs to Actual Damages

In the 2007 case of Santiago v. CF Sharp Crew Management, Inc., [G.R. No.
162419, July 10, 2007], the High Court ruled that the respondent which failed to
deploy the petitioner overseas after a POEA-approved employment contract
was signed by them, is liable to the latter for actual damages. Respondent’s act
of preventing petitioner from departing the port of Manila and boarding “MSV
Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause of
action. Respondent unilaterally and unreasonably reneged on its obligation to
deploy petitioner and must, therefore, answer for the actual damages he
suffered. Article 2199 of the Civil Code provides that one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Respondent is thus liable to pay petitioner actual damages in the
form of the loss of nine (9) months’ worth of salary as provided in the contract.

B. Entitlement of OFWs to Moral and Exemplary Damages and Attorney’s Fees

In the 2005 case of Athenna International Manpower Services, Inc. v.
Villanos [G.R. No. 151303, April 15, 2005], the High Tribunal ruled that because of
the breach of contract and bad faith alleged against the employer and the
petitioner recruitment agency, the award of P50,000.00 in moral damages and
P50,000.00 as exemplary damages, in addition to attorney’s fees of ten percent
(10%) of the aggregate monetary awards, must be sustained. These were also the
amounts awarded by way of moral and exemplary damages and attorney’s fees
in the case of Oriental Shipmanagement Co., Inc. v. Hon. CA, [G.R. No. 153750,
January 25, 2006].

Also, in the case of ATCI Overseas Corporation v. CA, [G.R. No. 143949,
August 9, 2001, 414 Phil. 883, 893], the award of attorney’s fees equivalent to ten
percent (10%) of the total award was held legally and morally justified as the
OFWs were compelled to litigate and thus incur expenses to protect their rights
and interest.

However, in Acuña v. Hon. CA, [G.R. No. 159832, May 5, 2006], petitioners
alleged that they suffered humiliation, sleepless nights and mental anguish,
thinking how they would pay the money they borrowed for their placement fees.
The Supreme Court, however, did not consider this allegation sufficient to merit
the award of moral damages, absent any evidence to prove bad faith, fraud or
ill motive on the part of private respondents. Consequently, without the award of
moral damages, there can be no award of exemplary damages, nor attorney’s
fees.

58. Basis of computation of death benefits of OFW

Where the contract of a Filipino seaman provides that the workmen’s

compensation benefit shall be computed on the basis of whichever is greater
between Philippine law or the law of the registry of the vessel, it is correct to
resolve the award based on the law of registry of the vessel providing greater
benefit. [Principe v. Philippine-Singapore Transport Service, Inc., G.R. No. 80918,
Aug. 16, 1989].
The standard contract of employment for Filipino seamen allows the
payment of death benefit pension, funeral benefit and burial gratuity to the
private respondent-worker. [Eastern Shipping Lines, Inc. v. POEA, G.R. No. L-76633,
October 18, 1988].
The death of a seaman during the term of employment makes the
employer liable to his heirs for death compensation benefits. Once it is established
that the seaman died during the effectivity of his employment contract, the
employer is liable. However, if the seaman dies after the termination of his
contract of employment, his beneficiaries are not entitled to death benefits.
[Hermogenes v. Osco Shipping Services, Inc., G.R. No. 141505, August 28, 2005].
Thus, in Prudential Shipping and Management Corp. v. Sta. Rita [G.R. No.
166580, February 8, 2007], Virgilio, respondent’s deceased husband, was
repatriated for medical reasons. He arrived in the Philippines on March 8,
2000 for surgical repair after he was diagnosed with umbilical hernia.
Virgilio’s employment was thus terminated upon his repatriation on March
8, 2000. Consequently, when he died on March 18, 2001, his employment
with petitioners had long been terminated. Hence, respondents are not
entitled to receive death benefits under the Contract from petitioners.

In Mabuhay Shipping Services, Inc., v. NLRC, [G.R. No. 94167, January 21,
1991], the Supreme Court held that the death of a seaman during the term of
employment does not automatically give rise to compensation. The
circumstances which led to the death as well as the provisions of the contract,
and the right and obligation of the employer and the seaman must be taken into
consideration, in consonance with the due process and equal protection clauses
of the Constitution.

59. “during the term” meaning

Means that during the effectivity of his employment contract.

60. Existence of degree of seafarer’s disability; how determined and declared

Pursuant to Sec. 20 (A) of the 2010 POEA-SEC, the employer is liable for
disability benefits when the seafarer suffers from work-related injury or
illness during the term of his contract. In this regard, Sec. 20 (E) thereof
mandates the seafarer to disclose all pre-existing illnesses or conditions in
his PEME; failing in which shall disqualify him from receiving disability
compensation. Sec. 20 (E) “A seafarer who knowlingly conceals a pre-
existing illness or condition in the Pre-Employment Medical Examination
(PEME) shall be liable for misrepresentation and shall be disqualified from
any compensation and benefits. This is likewise a just cause for termination
of employment and imposition of appropriate administrative sanctions.”

An illness shall be considered as pre-existing if prior to the processing of

the POEA contract, any of the following conditions are present:
a. The advice of a medical doctor on treatment was given for such
continuing illness or condition; or
b. The seafarer had been diagnosed and has knowledge of such illness or
condition but failed to disclose the same during the PEME, and such
cannot be diagnosed during the PEME.

61. Award in foreign currency; how computed

In Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No.
8042 states that:

"In case of termination of overseas employment without just, valid or

authorized cause as defined by law or contract, or any unauthorized
deductions from the migrant worker's salary, the worker shall be entitled
to the full reimbursement if (of) his placement fee and the deductions
made with interest at twelve percent (12%) per annum, plus his salaries for
the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.

However, the clause, "or for three (3) months for every year of the
unexpired term, whichever is less" in Section 7 of Republic Act No. 10022
amending Section 10 of Republic Act No. 8042 is declared unconstitutional
and, therefore, null and void (Sameer v Cabiles GR170139, Aug 5, 2014).
 Additionally, the Supreme Court in the case of Antonio M. Serrano vs. Gallant
Maritime Services, Inc. and Marlow Navigation Co., Inc. (G.R. No. 167614, March
24, 2009) has brought clarity and definitiveness to the issue of entitlement to
benefits of a seafarer in case he is illegally dismissed. It made certain that the
seafarer should receive his salaries for the entire unexpired portion of his contract,
and not just for three months. With the above ruling, the Supreme Court has
reverted to the old, simple, and logical manner by which claims of illegally
dismissed OFWs are computed, i.e., their basic salaries multiplied by the entire
unexpired portions of their contracts.

62. Migrant workers and other OFW Resource Center services (a-k)

Pursuant to Sections 19 and 23 of the Migrant Workers and Overseas Filipinos Act
of 1995, a Migrant Workers and Overseas Filipinos Resource Center (Filipinos
Resource Center) shall be established in countries where there are at least 20,000
migrant workers. Where feasible it shall be established within the premises of the
Embassy.

When the Filipinos Resource Center is established out side the premises of the
Embassy, the Department of Foreign Affairs shall exert its best effort to secure
appropriate accreditation from the host government in accordance with
applicable laws and practices.

Services

The Filipinos Resource Center shall provide the following services:

a. Counseling and legal services;

b. Welfare assistance including the procurement of medical and
hospitalization services;
c. Information, advisory programs to promote social integration such as post-
arrival orientation, settlement and community networking services and
activities for social interaction;
d. Registration of undocumented workers to bring them within the purview of
the Act;
e. Implementation of the Voluntary Membership Program of OWWA;
f. Human resource development, such as training and skills upgrading;
g. Gender-sensitive programs and activities to assist particular needs of
migrant workers;
h. Orientation program for returning workers and other migrants;
i. Monitoring of daily situation, circumstances and activities affecting migrant
workers and other overseas Filipinos;
j. Seeing to it that labor and social welfare laws in the host country are fairly
applied to migrant workers and other overseas Filipinos, and
k. Conciliation of disputes arising from employer-employee relationship.
 63. Funds established for OFWs (1-4)

Section 18 of Republic Act No. 10022

Section 18. Section 25 of Republic Act No. 8042, as amended, is hereby

amended to read as follows:

"SEC. 25. Legal Assistance Fund. - There is hereby established a legal assistance
fund for migrant workers, hereinafter referred to as the Legal Assistance Fund, in
the amount of one hundred million pesos (P100,000,000.00) to be constituted
from the following sources.

(1)"Fifty million pesos (50,000,000.00) from the Contingency Fund of the President;

(2)"Thirty million pesos (30,000,000.00) from the Contingency Fund of the

President Social Fund;

(3)"Twenty million pesos (20,000,000.00) from the Welfare Fund for Overseas
Workers established under Letter of Instructions No. 537 as amended by
Presidential Decree Nos. 1694 and 1809; and

(4)"An amount appropriated in the annual General Appropriations Act (GAA)

which shall not be less than Thirty million pesos (30,000,000.00) per year:
Provided, that the balance of the Legal Assistance Fund (LAF) including the
amount appropriated for the year shall not be less than One hundred million
pesos (P100,000,000.00) : Provided, further, That the fund shall be treated as a
special fund in the National Treasury and its balance, including the amount
appropriated in the GAA, which shall form part of the Fund, shall not revert to
the General Fund.

" Any balances of existing funds which have been set aside by the government
specifically as legal assistance or defense fund to help migrant workers shall
upon effectivity of this Act, be turned over to, and form part of, the Fund
created under this Act."

64. Mandatory obligation to remit foreign exchange earnings (a-u)

Article 22 of Presidential Decree No 442, Labor Code

ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be

mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the
country in accordance with rules and regulations prescribed by the Secretary of
Labor.

It is thus mandatory for a worker or seaman to remit regularly a portion of his

foreign exchange earnings abroad to his beneficiary through the Philippine
banking system. The obligation to remit is required to be stipulated in the
following documents:

1. Contract of employment and/or service between a foreign-based

employer and a worker;
2. Affidavit of undertaking whereby a worker obligates himself to remit a
portion of his earnings to his beneficiaries;
3. Application for a license or authority to recruit workers;
4. Recruitment agreement and/or service contract between a licensed
agency or authority holder and its foreign employer or principal; and
5. Application for accreditation of a principal or project (Section 2, Rule XIII,
Book I, Rules to Implement the Labor Code)

Amount of Foreign Exchange Remittances

The percentage of foreign remittance shall be as follows:

1. Seamen and mariners: Eighty percent (80%) of the basic salary

2. Workers of Filipino contractors and construction companies: Seventy
percent (70%) of the basic salary;
3. Doctors, engineers, teachers, nurses, and other professional workers
whose employment contracts provide for free board and lodging
facilities; Seventy percent (70%) of the basic salary;
4. All other professionals whose employment contracts do not provide free
board and lodging facilities: Fifty percent (50%) of the basic salary;
5. Domestic and other service workers: Fifty percent (50%) of the basic
salary;
6. All other workers not falling under the afore-mentioned categories: Fifty
percent (50%)of the basic salary. (Section 2, Executive Order No. 857)

Performing artists overseas are required to remit at least fifty percent (50%) of
their monthly salary to the Philippines. (Section B [7], DOLE Order No. 35, Series
of 1994)

65. Employment standards for land-based OFWs (a-d)

EMPLOYMENT STANDARDS FOR LAND-BASED OVERSEAS FILIPINO WORKERS

(According to the Revised POEA Rules and Regulations Governing Recruitment

and Employment of Land-based Overseas Filipino Workers of 2016)

PART V
EMPLOYMENT STANDARDS

RULE I

Formulation of Employment Standards

SECTION 134. Employment Standards. – The Administration shall secure the best
possible terms and conditions of employment for Overseas Filipino Workers. As
such, it shall develop and continually review employment standards in
accordance with policy thrusts and market developments.
SECTION 135. Minimum Provisions of Employment Contracts. – Consistent with
welfare promotion thrusts of the Administration, the following shall be the
minimum provisions in employment contracts for Overseas Filipino Workers:
a. Complete name and address of the employer/company;
b. Position and jobsite of the Overseas Filipino Worker;
c. Basic monthly salary, including benefits and allowances and mode of
payment. The salary shall not be lower than
the prescribed minimum wage in the host country or prevailing
minimum wage in the National Capital Region
of the Philippines, whichever is higher;
d. Food and accommodation or the monetary equivalent which shall be
commensurate to the cost of living in the
host country, or off-setting benefits;
e. Commencement and duration of contract;
f. Free transportation from and back to the point of hire, off-setting benefits,
and free inland transportation at the
jobsite or off-setting benefits;
g. Regular work hours and day off;
h. Overtime pay for services beyond the regular working hours, rest days
and holidays;
i. Vacation leave and sick leave for every year of service;
j. Free emergency medical and dental treatment;
k. Just/valid/authorized causes for termination of the contract or of the
services of the workers, taking into
consideration the customs, traditions, norms, mores, practices,
company, policies and the labor laws and social
legislations of the host country;
l. Settlement of disputes;
m. Repatriation of worker in case of imminent danger due to war, calamity,
and other analogous circumstances, at
the expense of employer; and
n. In case of worker’s death/repatriation of Overseas Filipino Workers
human remains and personal belongings, at
the expense of the employer.

The Administration may formulate country- or skills- specific policies and guidelines
based on the following:
a. Existing labor and social laws of the host country;
b. Relevant bilateral and multilateral agreements or arrangements with the
host country; and
c. Prevailing conditions/realities in the market.

SECTION 136. Freedom to Stipulate. – Parties to overseas employment contracts

are allowed to stipulate other terms and conditions and other benefits. These
benefits should be over and above the minimum requirements. Said benefits shall
not be contrary to law, public policy and morals.

SECTION 137. Disclosure of Terms and Conditions of Employment. – The licensed

recruitment agency shall, prior to the signing of the employment contracts, inform
the Overseas Filipino Workers of their rights and obligations, and disclose the full
terms and conditions of employment. The licensed recruitment agency shall
likewise ensure that the Overseas Filipino Worker is provided with a copy of the
POEA-approved contract, to give the Overseas Filipino Worker ample opportunity
to examine the same.

66. Employment standards for seafarers (a-b)

EMPLOYMENT STANDARDS FOR SEAFARERS

(According to the 2016 Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Seafarers, Issue on February 26, 2016)

PART IV
EMPLOYMENT STANDARDS

RULE I

Formulation of Standard Employment Contracts

SECTION 115. Standard Employment Contracts. – The Administration, through

tripartite consultation involving the seafarers and the private sector, shall
determine, formulate and establish minimum, separate and distinct standard
employment contracts for seafarers, in accordance with accepted international
standards and maritime practices. These standard employment contracts, which
shall be reviewed periodically to keep them attuned to international requirements
and demands, shall be minimum requirement in every individual contract
approved by the Administration.

SECTION 116. Freedom to Stipulate. – Parties to the individual employment

contract are allowed to stipulate and mutually agree to other terms and
conditions over and above the minimum standards; provided, that the
stipulations are mutually beneficial to both parties and are not contrary to law,
public policy and morals.

SECTION 117. Disclosure of Terms and Conditions of Employment. – The licensed

manning agency and the seafarer shall fully disclose all relevant information in
relation to the recruitment and employment of the seafarer.

67. Validity of POEA – SEC (a-d)

VALIDITY OF POEA STANDARD EMPLOYMENT CONTRACTS (POEA-SEC)

a. Validity of standard form contracts

b. Invalidity of contract diminishing salary
c. Interpretation of overseas employment contract
d. Stipulation on SSS coverage of OFWs

Validity of standard form contracts

 The POEA Standard Employment Contract(POEA-SEC) for OFW is designed
primarily for the protection and benefit in the pursuit of their employment
overseas. Its provisions must, therefore, be construed and applied fairly,
reasonably and liberally in their favor. Only then can its beneficent provisions be
carefully carried into effect. (Philippine Transmarine Carriers Inc. v. NLRC; Wallem
Maritime services Inc. v. NLRC)

- In another case (Vir-Jen Shipping and Marine Services v. NLRC), an issue

was raised by the movants on whether or not the seamen violated their
contracts of employment when they demanded 50 % increase in salaries
and benefits. The Supreme Court ruled that the form contracts approved
by the National Seamen Board (now POEA) are designed to protect
Filipinos, not foreign shipowners who can take care of themselves.

The standard forms embody the basic minimum which must be

incorporated as parts of the employment contracts (Sec. 15 Rule V, Rules
and Regulations Implementing the Labor Code). They are not collective
bargaining agreements or immutable contracts which the parties cannot
improve upon or modify in the course of an agrred peril of time.

To state therefore, that the affected seamen cannot petition the employer
for higher salaries during the 12 months duration of the contract runs
counter the established principles of labor legislation. The National Labor
Relations Commission, as the appellate tribunal from the decisions of the
National Seamen Board, correctly ruled that the seamen did not violate
their contracts to warrant their dismissal.

In Suzara v. NLRC, the SC ruled that the act of the dismissed seamen in
asking for increases in their salaries does not constitute a breach of their
employment contracts.

Invalidity of contract diminishing salary

A contract which diminishes the pay and benefits of the employee as

embodied in the contract duly approved by the POEA is null and void. The
EXCEPTION is when such subsequent contract providing for lesser pay and
benefits is approved by the POEA. ( Chavez v. Bonto-Perez)

Interpretation of overseas employment contract

Any ambiguity in the overseas employment contract shall be interpreted

against the parties that drafted it. (Cadalin v. POEA’s Administrator)

Labor contracts must be interpreted liberally in favor of the worker. (Ditan

v. POEA)

The provisions contained in the standard contract of employment for

Filipino seamen pursuant to Memorandum Circular No. 2 (effective on February
1, 1984), are manifestations of the State in favor of the working class consistent
with the social justice and protection of the working class provisions of the
Constitution. Consequently, the payment of death benefit pension, funeral
benefit and gratuity to private respondent, will not preclude allowance to private
respondent’s claim against petitioner which is specifically reserved in the said
contract or employment. (Eastern Shipping Lines, Inc. v. POEA)
Stipulation on SSS coverage of OFWs

Foreign Shipowners and manning agencies had generally expressed their

conformity to the inclusion of Filipino seafarers on board foreign vessels, within the
coverage of the Social Security Act.

The extension of coverage of the Social Security System to Filipino Seafarers

arises by virtue of the assent given in the contract of employment signed by the
employer and the seafarer. By extending the benefits of the Social Security Act to
Filipino Seafarers , the individual employment agreement entered into with a
stipulation of such coverage contemplated in the DOLE-SSS Memorandum
Agreement merely gives the effect to the constitutional mandate affording
protection to labor. (Sta. Rita v. CA)

68. Prohibited practices under Art. 34

Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee,
or holder of authority:

a. To charge or accept, directly or indirectly, any amount greater than that

specified in the schedule of allowable fees prescribed by the Secretary of
Labor, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
b. To furnish or publish any false notice or information or document in relation
to recruitment or employment;
c. To give any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or authority
under this Code.
d. To induce or attempt to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed
to liberate the worker from oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ
any worker who has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to
public health or morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or
by his duly authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures
and such other matters or information as may be required by the Secretary
of Labor.
i. To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties
up to and including the periods of expiration of the same without the
approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged
in travel agency or to be engaged directly or indirectly in the management
of a travel agency; and
k. To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those
authorized under this Code and its implementing rules and regulations.